A trading company is a company that specializes in buying and selling products, acting as an intermediary between manufacturers and customers, and arranging the delivery or introduction of the products to a specific market.
Trading companies that ultimately deliver the goods to the customer also set up stores and warehouses so as not to become dependent on a manufacturer's ability to supply products on demand. Another peculiarity of trading companies is that they usually act as points of sale for several manufacturers; That is, one outlet sells the goods manufactured by several companies. Although this is not a requirement, in practice it is very likely that a shop selling the products of only one manufacturer will be a retail outlet of that manufacturer and not a trading company. In addition, trading companies can arrange all necessary procedures for the delivery of goods, including procedures for international trade.
Depending on the particular business, a trading company can function as either a retailer, a wholesale business, or a combination of both. A retail company sells products to the end customer and usually in comparatively small quantities. A wholesale company caters to other businesses (including other trading companies) and typically sells products in bulk for further distribution, e.g. in retail stores.
[b]Functions of a trading company
[/b]The functions of a trading company depend on the particular industry in which it operates, but generally include the following:
[b]Purchase of goods from manufacturers
[/b]
B2B (Business-to-Business) Trading Company
The most extensive use of trading companies is as intermediary trading companies or B2B companies. These businesses usually 1) specialise in a certain range of products or services, which they purchase from suppliers or merchants; 2) broker the products or services (i.e. add value and commission to the transaction); and 3) coordinate the logistics of delivering these products/services to the purchasing company (i.e. arranging the delivery and providing their own or affiliated transportation services).
B2C (Business-to-Consumer) Trading Company
B2C refers to selling products or services to the end client, and so the final destination of the trading company’s goods is usually a shop.
Sale of goods to businesses and consumers
store goods for sale
Matching goods in a retail chain
Furnishing of storage rooms and points of sale
Management of international commercial operations
Make logistical arrangements for the delivery of goods
In general, the main function of a trading company is to source goods from manufacturers and deliver them to customers. In this context, a trading company can undertake any task necessary to achieve this purpose. They may also be involved in the negotiation and use of land grants that allow a company to own, manage, and develop a property, including land and buildings. Obviously, for a trading company as a legal entity, this is an additional opportunity and not an essential business function or function.
Types of trading companies
There are two main types of trading companies:
B2B (Business-to-Business) trading company
B2C (Business-to-Consumer) trading company
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