Merchants

Merchant Definition:

Below is the definition of a merchant.

Difference between Trader and Merchant

A trader is a person who makes a living by purchasing goods and selling them for a profit. A merchant works in retail or owns a retail business that sells goods.

What did merchants do? They facilitated bargaining and trading, helping to create more stable markets. They also helped to make an exchange network, which not only supported the movement of goods but also the movement of ideas.

The actions of merchants had long-term effects. They developed business practices still used today, including double-entry bookkeeping, insurance, extending credit, and charging interest on loans.

Merchants History

Merchants have been a part of the economy for as long as people have wanted to trade different types of commodities.

After the Roman Empire fell, European people lived under the system of feudalism. Most of these people were peasants who worked the land of the nobility. While merchants were more potent than peasants, their social class was small.

The Crusades in the 11th century opened up new trade routes while at the same time creating a greater need for merchants. Merchants suddenly found themselves responsible for helping European crusaders obtain food and other supplies for their armies. Merchants acted as middlemen, going back and forth between the troops and suppliers. As you may expect, the increased need for merchants led to more.

Merchants were able to travel to new lands and access new varieties of goods like spices, textiles, and other raw materials.

The Middle Ages found trade exploding in popularity as merchants gained wealth and social standing. Market towns became popular in the 12th century. Traders would take local goods to market towns.

As access spread to exotic lands, medieval merchants began to sell goods from faraway places. Market towns started growing at an even faster pace. Merchant guilds began to grow as well.

Merchants continued to evolve into the 13th century. They became more stable and less nomadic. In addition to buying and selling goods, merchants began financing and transporting goods.

The 13th and 14th centuries brought increased retail activity and the decline of feudalism. This propelled the merchant class to a higher social standing. Medieval fairs became a popular way to sell goods.

Two classes of merchants emerged in 16th-century Europe. One group was the local merchants, and the other was merchants who worked with people outside the area, juggling sales in addition to importing/exporting goods, credit, and finance.

Fig. 2: Marco Polo.

Merchant Guilds

Merchant guilds began as groups of traders gathered to deal with problems related to power struggles with lords and landlords, theft, networks, and resources. The first guilds were formed in Europe during the 11th century.

Merchant guilds provided protection and resources to their members, especially during feudal times. Establishing guilds led to protection from unfair tax policies. Guilds also protected merchants and traders as they traveled from town to town.

Guild leaders became powerful, and guilds became more exclusive, leading to the creation of craft guilds.

Fig. 3: Shield of the Butchers' Guild.

Merchant Trade

Merchants in the Middle Ages used both sea and land to trade. The Silk Road and Medieval Fairs are a couple of examples.

Venetian and Genoese merchants traded on land and water.

Medieval Fairs

Medieval Fairs were one-way merchants sold goods. A Medieval Fair was a sociocultural gathering and economic marketplace, often occurring at the same time as major religious holidays. Once acting as a forum for religious celebrations, these events transitioned into marketplaces. Vendors would come from all over to sell goods like wine, spices, meat, and animals.

In the 12th and 13th centuries, medieval fairs were the primary way merchants could buy and sell goods.

Silk Road

The Silk Road was an important trade network during the Middle Ages. It connected Europe and parts of Asia. Merchants used the Silk Road between 130 BCE and 1453 CE.

Merchants used the Silk Road to import and export various goods. Some examples include silk, jewelry, porcelain, and spices.

Fig. 4: The Silk Road Route.

Genoese Merchants

Merchants in Genoa, Italy, made a name for themselves. They bought and sold goods in many places, including the Byzantine Empire, Egypt, and modern-day Libya. Genoese Merchants participated in the Mediterranean Slave Trade in the 12th and 13th centuries.

Venetian Merchants

Venetian merchants became esteemed maritime traders due to Venice's location in the Mediterranean. Not only did these merchants trade with other European cities and trade with the Middle East and North Africa, and traveled the Silk Road to China.

Fig. 5: A Mosaic of Marco Polo.

Merchants Summary

A merchant buys and sells goods other people produce, usually in a retail business. A trader makes a living by purchasing goods and reselling them to others.

After the fall of the Roman Empire, the system of feudalism evolved. The merchants were a small class of people with moderate power in this system. However, the Crusades gave the merchants access to new trade routes to obtain more goods. They also acted as middlemen, helping to supply armies with goods.

The merchant class exploded in popularity and power in the Middle Ages. Market towns began to grow; Merchants unitized the Silk Road and Medieval Fairs to sell goods and reach new consumers. Guilds were formed to protect the merchant and his customers. Merchants continued to evolve with the decline of feudalism.

Merchants played a significant role in bargaining and trading, creating stable markets in their communities. They also made exchange networks that allowed people to exchange ideas, beliefs, and other cultural aspects besides goods. Merchants contributed to the spread of math, explicitly accounting. They developed modern business practices. These include double-entry bookkeeping, using insurance, extending credit, and charging interest on loans.