Over time, people wanted to leave their life of a serf and get a different job. Well, they didn't have any money. They needed a job but may not have had a skill or experience to get a job. Therefore, they moved to small towns and learned a skill or a trade.
In these small towns many goods or products were made. The towns had narrow streets and the neighbors lived very close to each other. Everyone wanted to make the most money they could. Guilds were organized to train workers in a job and to help them. Guilds also made rules and set prices.
A guild is a group of people who all work in the same job which they called a trade. For example, a baker belongs to the bakers guild, a candlestick maker to the candle guild, the dressmaker to the dressmaking guild, and so on.
There were three levels in each guild:
The master was the best of the best (the expert) and usually owned his own shop or business. He had to train all the journeymen who wanted to become masters. A journeyman was skilled but not yet an expert. As time went on they might become a master. A test or project was usually required. Finally, at the bottom were the apprentices. Apprentices were those just starting to learn the job or trade. They had to work hard. They were working and learning but were usually not paid any money. They received room & board while they learned from the master. This means they had a bed to sleep in and food to eat. This might not seem like a lot but it was better than being a serf since they might one day work their way up to being a master.
Guilds were designed to end competition. The guild made sure you didn't have any competition in your area so you could make a fair amount of money. It made sure the workers were spread out throughout towns & villages. The guild also had rules the members must follow. The guild set all the prices for the goods you made and set the wages a business owner could pay his journeymen. Your work also had to meet the standards of the guild. Poor work was not acceptable. Finally, advertising was not allowed. This gave every member of the guild an equal chance. It was very different from businesses that we have today but there are still some similarities too.