What Are Commodities? Definition, Why They Matter, Example

What Are Commodities?

By Jeremy Bowman – Updated Aug 7, 2025 at 6:23 PM

Key Points

Commodities are unbranded goods like oil and crops, traded on exchanges based on market demand.
Price changes in commodities impact consumer costs, notably in food and fuel.
Commodity investment relies on timing market shifts, not brand differentiation like Apple or Coca-Cola.

You've probably heard talk about commodities in the business media, and you might be able to think of some examples of commodities -- but how much do you actually know about them?

Commodities often describe the markets used to trade some of the world's most important goods. But there's much more to know about this market that's worth hundreds of trillions of dollars. In this look at the topic, we'll go over the definition of commodities, what you should understand about commodities, and why they matter to you as an investor and as a consumer.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.