How did trade and commerce grow during the middle ages

By the late Middle Ages, trade and commerce was expanding through the development of towns, the agricultural revolution and technological innovations. In towns, Trade Fairs were hosted as an important venue for merchants to exchange goods and settle accounts. The agricultural revolution also produced surplus food, which the Lords traded for luxury goods. 
As trade grew, money transactions replaced the barter system and by the 13th Century, coins were used extensively and were in high demand. Medieval kings and Italian city-states began to produce their own coins and banks were established as the need to borrow, standardize, secure, store and transport money increased. 

Goods and Geographies

The Silk Roads route and the countries it passed through

Following the Crusades there was an enormous demand for new goods including silk, spices, tea, salt, sugar and porcelain, which came via the Silk Road. The Silk Road was a 4000 mile long network of trade routes which connected the regions of the medieval world through trade. It ran from China to Eastern Europe, facilitating trade between different empires, spreading ideas, cultures, inventions and unique products across the world. The Silk Road is named after prestigious Chinese silk, which was one of the major products traded from East to West.
Wool and cloth was also increasingly in demand. The best weavers lived in Flanders (Belgium) and soon Flemish wool became a favoured medium of exchange. By the 14th Century, Venice -the most cosmopolitan city of medieval Europe - had control of trade to the Middle East and northern Europe. It created the Flanders Fleet, a route along the coastline of Europe from Venice to Flanders. This further strengthened Venice as a commercial city.

Guilds

Artists impression of guilds at work and symbols of guilds

With the growth of towns and trade, people working in specialist occupations united in associations called guilds. There was a guild for each occupation, including bakers, butchers, brewers, weavers, merchants, artisans and tradesmen. Guilds controlled the quantity and quality of goods produced, set prices and trained apprentices in the skills of their trade. Guilds obtained power, limited membership to control trade and protected their members in times of hardship or sickness. During the late middle ages, two types of guilds were developed: the merchant and craft guilds.