What Is a Commodity Market?

Commodity markets are marketing places and areas for physical goods. Including the market for the means of production, the market for the means of living and the service market. It is the oldest and still the most important market form. ^[1]

Commodity market

Commodity markets are marketing places and areas for physical goods. Including the market for the means of production, the market for the means of living and the service market. It is the oldest and still the most important market form. ^[1]

The commodity market consists of the consumer goods market,

First, the supply of commodities has become increasingly abundant, and the structure of supply and demand has become more reasonable. With the rapid development of the economy, the variety and quantity of commodities in the supply market have increased, and the quality grade has significantly improved. In the past few years, the production and operation of the organization based on market demand has achieved fruitful results.

Its formation and development require certain conditions, and the analysis is summarized as follows:

Regional economic development level

The level of regional economic level is reflected by indicators such as industrial concentration. With the gradual evolution of a product's life cycle from birth, growth, maturity, and stability, the number of enterprises will eventually move from a concentration to a relatively stable equilibrium. Generally speaking, the market concentration is very low in the early stages of industrial development. When the industry technology matures and enters the boom period, the market concentration will gradually increase, and then it will stabilize. With the decline of the industry, some manufacturers exit and the market concentration Will rise again. Finally, the organizational form and development level of the commodity market must be adapted to the stage of its economic development.

People's cultural quality

When people's income level and cultural quality are very low, bargaining is the main way of shopping, and people are used to this way. However, with the gradual improvement of people's living standards, the requirements on the commodity market will gradually increase. Some studies have pointed out that when the residents life is just enough to maintain adequate food and clothing, the key to commodity circulation is to reduce distribution costs and establish a food wholesale and retail system to meet low-income consumption needs. When household consumption is at a medium level, commodity agriculture has developed rapidly Production and sales are further separated, supermarkets and chain stores have begun to appear, and the role of consumer cooperatives and big city futures markets has become increasingly important. When the level of residents' consumption has reached a high level, modern supermarkets and specialty stores will play a more important role. More and more important role.

Local government's market monopoly and protection policies

When there is an oversupply of goods, in order to protect local production enterprises, local governments tend to use administrative methods and measures to prevent similar goods from other places from entering the local market. Obviously, local governments are protecting local interests. However, the result of regional protection and competition for their own interests often leads to market fragmentation, distorting market supply and demand, and further exacerbating market fluctuations. Moreover, because local protectionism has affected fair competition, it has protected backward and inefficient operators, which has led to a lack of competitiveness and long-term development potential in the local economy. From the perspective of the influence of industry sectors, for the benefit of this sector, some industry sectors conduct mandatory administrative intervention in the flow of goods, and to a certain extent, artificially interfere with the demand for goods in the industry. Doing so is not conducive to fair competition, to protect those backward and inefficient enterprises or departments, and the operating efficiency naturally declines.

The richness of market supply and demand

To form a commodity market with strong supply and demand, one is to extensively absorb foreign goods; the other is to strengthen the competitiveness of local goods. The more merchants gathered in a market, the richer the goods, the larger the market will be, and the stronger the market's radiant power, the better the market efficiency.

Development of small businesses

The continuous development and growth of small enterprises can improve the level of regional economic development and help the circulation of goods. For example, Zhejiang Yiwu Small Commodity Market, Hebei Baigou Bags Market, Shandong Shouguang Vegetable Wholesale Market, adhere to the business tenet of people regardless of North and South, goods regardless of things, units regardless of size, ownership regardless of public and private. These markets were initially formed as regional markets for the development of the local economy, but after a certain scale and climate were formed, they continued to grow and adapt to the requirements of opening up large markets. The marketing scope of the market was no longer limited to local economic development and local Residents' life services have instead expanded the scope of circulation to the whole country. The more people, logistics, business, and information flows, the more they gradually become national wholesale markets.