An
online trading company is a trading company that operates primarily through the internet and its e-commerce tools. Like any normal trading company, online trading companies specialize in buying goods from manufacturers and reselling them to consumers or other retailers. However, the online nature of this business makes it different and has specific advantages and limitations. Selling goods online offers tremendous opportunities and benefits, as it allows you to trade on a global scale and save on organizational and administrative costs such as wages, office rent and others.
The main difference is that a 100% online trading company (with no physical stores whatsoever, just headquarters and warehousing facilities) requires a virtual infrastructure, not a physical one. An offline trading company requires offices, shops, storage units and a logistics network connecting suppliers, offices and branches; An online trading company needs offices, storage units, powerful servers and websites, and a flexible logistics system that allows it to serve customers in many locations.
As you can see, online trading companies require less physical infrastructure, but they also have to be much more flexible in serving their customers. While a website is a beneficial addition for a regular trading company, for an online trading company it is an essential tool without which the company cannot function – hence the high demands on the performance of the website and the host server.
Functions of an online trading company
The main function of an online trading company is to purchase goods from a manufacturer and sell them on to retailers and consumers. A secondary, but nonetheless essential, task is to deliver the goods to customers, as usually online trading companies lack physical infrastructure, such as shops, outlets and other points of sale.
To buy and sell goods, an online trading company must set up a hub for transferring products from manufacturers to customers. In this case, that hub is a website. Just as a physical shop requires designers and marketing specialists to arrange and present products in the most advantageous way, a digital shop also requires specialists to guide customers through the possible buying options.
As for delivering goods, an online trading company can choose to either establish the delivery network itself, or outsource this task by entering into a contract with a logistics company. The online trading company then hands over its goods to the logistics company, which takes care of delivering the goods using its own network.
