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4 Part I  Overview of Commerce
With the recent popularity of digital social networking, the first definition of
commerce is gaining more relevance; however, it is the second meaning that is
our primary focus in this book
1
. We would also like to add the term “services”
to “ideas” and “opinions” in the preceding definition so that the term becomes
more relevant for our purposes.
Not only is commerce a fundamentally social phenomenon, it is also a very
human-specific act. At its core, commerce is a kaleidoscopic collision of humans’
unique ability to identify the need to optimize productivity, conserve energy,
increase the chance of survival, exercise social abilities, and ultimately embark
upon the act of exchange with other humans. Commerce is so deeply intertwined
in our social fabric, and is such an integral part of our day-to-day life, it would
be very hard to imagine civilization without it. By engaging in commerce, we
express another facet of our intelligent and social behaviors. In other words,
commerce is not just another simple human activity; it is a rather complex and
sophisticated process that requires a great deal of knowledge, care, and atten-
tion to implement properly.
The oldest form of commerce is the barter system, which typically follows a
direct-exchange mechanism where goods or services are directly exchanged
for other goods or services. Barter is a direct system; a person offers goods or
services to another person in exchange for goods or services that he needs. At
its most basic form, the barter system suffers from scalability. That is, one has to
physically carry the merchandise (in the case of goods), or be present personally
(in the case of services) to interested parties, one by one, to be able to exchange
for what he needs. Consequently, and to address this limitation, the marketplace
was created — a place where merchants and customers show up during certain
times and participate in exchanging goods and services. The marketplace is a
social construct; that is, one needs to exercise communication, negotiation, and
evaluation skills, among others, to successfully participate. The social facets of
the marketplace are important here because they’re also aspects of e-commerce.
Examples include establishing trust, providing value for a purchase, facilitating
delivery of goods or services, and many more.
Hard vs. Digital Goods
Before we proceed further with the foundations of commerce, it is important
to note the differences between hard goods and digital goods. Early on, people
identified value in two categories: tangible products and intangible products.
As the name implies, tangible goods deal with the area of commerce that has
to do with physical merchandise and products such as commodities, vehicles,
devices, and so on. Intangible goods, on the other hand, include products that
are not physical entities, such as insurance policies and refund guarantees for
payments, and usually have more to do with services and promises of actions.
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