What is the contribution of a trade company? Isn't it better for a buyer to buy products from the manufacturer?


I think a trade company is unnecessary. It only lengths the chain. Many trade companies pretends to be a manufacturer, but actually they are not. What positive a trade company make? Why do we need a trade company?

Business Selling Business Morality

asked Jul 6 '10 at 21:22
116 points
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3 Answers


A postivie trade company creates value. Simple. There are many scenarios where buying from "A" manufacturer is not viable because i want, for example, an easy way to buy from "a number" of manufacturers.

Like a building company (smaller). They need MANY things that come from MANY manufacturers. Dealing with all of them would be more expensive than going through trading outlets (wholesalers) that deal with all the stuff. This gets worse in import scenarios, where stuff like long transfer times and customs come in. I was running a number of scenarios whrere we were buying computer parts, sometimes in not end user amounts (palletes CPU coolers, dozens of discs etc.). Dealing with Manufacturers would have been more expensive (take time into the equation) than buying from ONE or TWO wholesalers that carried the complete lines (from different manufacturers). This is just an example.

Or take office materials. Most businesses buy quite some of them, but not large amounts from one manufacturer. Even if more expensive - sorry - it is finally CHEAPER to buy them from trading companies (wholesellers). Just because I need like a pallete of office paper does NOT mean that I want to deal with a dozen companies just to find out the prices.

answered Jul 12 '10 at 00:48
Net Tecture
11 points


@ jack - imagine, every time you want to check the physical quality or want to check iPhone in your hands, you would have to travel a lot to the manufacturer's outlet.

answered Mar 1 '12 at 08:18
1 point


Who would you buy a computer from, Intel? Apple doesn't manufacture anything (they do write the OS).

Some products are either complicated, require extensive installation, training and/or work in combination with other products. This is a perfect candidate for a trade company or reseller. The manufacturer can focus on making their products and not all of the other issues associated with the final sale.

answered Jul 6 '10 at 22:49
Jeff O
6,169 points

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