What is a trading company

Trading company

1. Term: Independent institution whose main activity is the distribution of goods (trade). Trading operation is an economic, technical, social and ecological system in which entrepreneurs or managers and employees combine externally produced services in kind or old products and used packaging with services they produce to create marketable trading services and offer these on self-created (usually regional) markets for a fee. According to their position in the distribution process: foreign, wholesale and retail operations, to be further subdivided into branches according to predominantly traded goods types (e.g. food, furniture, electronics). Trading companies can operate on several levels of trade, e.g. the concentration forms of trade and forms of cooperation in trade, or on just one level. You can use one or more sales channels (so-called multi-channeling): Commercial operations are the subject of commercial operations.

Model of a trading company: see illustration "trading company".

2. Aims: Special features result for the commercial enterprise from the legal form, the regionally decentralized activity as well as the variety of operational forms.

a) The commercial sectors of the Federal Republic of Germany are largely medium-sized organized, most of the businesses are run as medium or small businesses by the owners themselves. Personal legal forms including the GmbH & Co. KG are predominant. For these undertakings, precisely formulated goals are rarely given. In addition to profit maximization, standard income, security and independence as well as social responsibility for employees and customers are typical goals.

b) At Large companies In the legal form of corporations, problems arise in setting goals because, in addition to the management in the head office, a large number of branch managers are decentralized who demand a say in the specific sales targets (range, price, advertising) in order to be able to meet regional consumption needs. Dealing with this conflict is the central management problem in cooperative groups in commerce.