Unit 1
Commerce and choice; More decisions to make; Comparison shopping
Commerce examines how people earn their income, how they spend their money and how and what goods and services are produced.
Table of Contents
“Congratulations! You are about to begin the exciting subject called ‘Commerce’. Commerce is not a totally new subject to you. In one sense you have been practising Commerce ever since you made your first purchase many years ago. That simple transaction launched you on life’s journey as a consumer and as an important part of the commercial world.” – New Concepts in Commerce Second Edition
uh oh.
Commercial choices
Commercial choices include earning, spending, and saving your income.
Common commercial choices include:
- what to buy
- where to go on holiday
- where to live
- what career to follow
- what investment to make
- saving versus spending
Sometimes, we might ask some basic questions before deciding to purchase something:
- Do I really want this item?
- Can I afford it?
- Is there something better?
What is a consumer?
A consumer is someone who purchases goods and services to satisfy needs and wants.
Decisions to make
The most basic financial decision for consumers to make is how much of their income to save and spend.
- Income is money received on a regular basis from work, property, business, investment, or welfare.
Consumers can plan spending and saving by making a financial plan called a budget.
A business is any organisation that produced and sells goods and/or services in order to make a profit. It provides people with employment as well.
Business decisions include:
- Who should I sell my good/service?
- How much will I charge?
- Where will I get my supplies?
- How will I market my business?
The labour force consists of anyone aged 15 and over whon are either employed or unemployed. Deciding what career path to take can include considering:
- abilities, interests and personalities
- career market – what is available now as well as future prospects
- how to become qualified and prepare for a job
Legal decisions are complex. Consumer protection laws that outline a consumer’s rights and responsibilities include:
- Competition and Consumer Act 2010 (Cwth)
- Fair Trading Act 1987 (NSW)
More on consumer protection laws is covered in Unit 3.
Consumers can decide to purchase products less harmful to the environment.
Comparison shopping
Comparison shopping is the act of shopping around for the best deal. Online shopping has made this easier. However, one should always avoid the temptation of impulse buying: buying something without giving much thought as to whether you really need it.
Types of goods and services
Some shops are cheaper than others. Larger stores such as department stores and discount variety stores tend to be cheaper than independent stores as they carry more stock. However, small retailers focus on service.
Brands and products
Well known and highly reputable brands tend to be more expensive than non-well known brands. They are usually higher quality but this is not always the case.
Choosing what to buy
There are eight rules for comparison shopping
- Thinking carefully about what you want
- Shop around for the best deal
- Investigate the product’s features
- Decide beforehand how you want to pay
- Check the refund and returns policy
- Do not sign anything you do not understand or a blank form
- Compare after-sales service and guarantees
- Keep all receipts and invoices
Here is an Adrian tip. Use the acronym COMPARE to remember what you need to consider when making wise purchasing decisions. Don’t use this in the exam though.
- Compare
- Observe
- Momentary impulse buying
- Payment
- Aftersales service, guarantees and refund/return policies
- Records and receipts
- Ensure you need it