Definition of Trading Companies

Trading companies --- companies that deal with international trade --- have existed for centuries. Early examples include the British, Dutch and Danish East India companies, chartered in the early 17th century. Today, some trading companies import or export goods and services, while others assist other companies by providing various services.

Export Trading Companies

Export trading companies sell their products or services to buyers in foreign countries. Doing so increases a company's profits by expanding the market for what it produces.

Import Trading Companies

Import trading companies purchase products or services from abroad and resell them domestically. Importing allows a company to obtain things that are unavailable in its home country or that are produced more cheaply elsewhere, thus saving the company money. Some of these companies rely so heavily on imports from foreign suppliers that they have few employees of their own and have come to be referred to as hollow companies.

Logistics and Representative Trading Companies

Instead of importing or exporting things, some trading companies provide services to businesses involved in international trade. Logistics trading companies offer labor, storage and other logistical support. Representative trading companies serve as advisers to exporters or help them establish business contacts in other countries.

References

• Economy Watch: Trading Company
• Imexfor: FAQ
• My Own Business: International Trade
• Scholiast: Tranquebar: The Danish East India Company 1616-1669