An online trading company is a trading company that primarily operates via the internet and its electronic commerce tools. Much like any regular trading company, online trading businesses specialise in buying goods from manufacturers and selling them on to consumers or other retailers. However, the online nature of this business makes it different, presenting specific benefits and limitations. Selling goods online offers huge opportunities and advantages, allowing you to trade on a global scale and save on organisational and administrative costs such as wages, office rent and others.

The main difference is that a 100% online trading company (without any physical shops whatsoever, just headquarters and storage facilities) needs a virtual rather than a physical infrastructure. An offline trading company needs offices, shops, storage units and a logistics network linking suppliers, offices and outlets; an online trading company requires offices, storage units, powerful servers and websites, as well as a flexible logistics system that allows it to serve customers scattered across many locations.

As you can see, online trading companies require less physical infrastructure, but they must also be a lot more flexible in serving their customers. Moreover, while for a regular trading company a website is a beneficial addition, for an online trading company it is an essential tool, without which the enterprise cannot function hence the high requirements for the capabilities 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.