Trading House

DEFINITION of 'Trading House'

A business that specializes in facilitating transactions between a home country and foreign countries. A trading house is an exporter, importer and also a trader that purchases and sells products for other businesses. Trading houses provide a service for businesses that want international trade experts to receive or deliver goods or services.

BREAKING DOWN 'Trading House'

A trading house serves as an intermediary. It might purchase t-shirts wholesale from China, then sell them to a retailer in the United States. The U.S. retailer would still receive wholesale pricing, but the price would be slightly higher than if the retailer purchased directly from the Chinese company. The trading house must mark up the price of the goods it sells to cover its costs and earn a profit. However, the t-shirt retailer avoids the hassles of importing. The retailer also may be able to simplify its operations by dealing with one or two trading houses to get its inventory instead of dealing directly with numerous wholesalers.

RELATED TERMS
  1. Wholesale Banking

    Banking services between merchant banks and other financial institutions. ...
  2. Housing Starts

    The number of new residential construction projects that have ...
  3. Housing Bonds

    Debt securities issued by state or local governments to raise ...
  4. Central Counterparty Clearing House ...

    An organization that exists in various European countries that ...
  5. House Price Index - HPI

    A broad measure of the movement of single-family house prices ...
  6. Terms of Trade - TOT

    The value of a country's exports relative to that of its imports. ...
Related Articles
  1. Managing Wealth

    Where International Real Estate Is Booming

    Which country has the hottest property market right now? The answer will undoubtedly surprise you.
  2. Personal Finance

    5 Ways an Open House Can Actually Hurt Your Home Sale

    Open houses have long been a way to get exposure for a home that's up for sale. But it turns out it may be more trouble than it is worth.
  3. Markets

    The Balance Of Trade

    The balance of trade is the difference between a country’s imports and exports. A trade deficit occurs when a country buys or imports more goods from other countries than it sells or exports. ...
  4. Personal Finance

    Where's The Next Housing Bubble?

    Countries outside of the U.S. are showing definite signs of housing bubbles - but which will be the first to pop?
  5. Personal Finance

    5 Mistakes to Avoid When Buying a New Home

    Understand five specific mistakes to avoid when buying a new home.
  6. Personal Finance

    8 Signs Of A Real Estate Rebound

    Wondering when prices will start to turn around in your area? We'll show you how to get in the know.
  7. Markets

    Growth and Politics In Exports

    An export is a good or service that is shipped from one country to another for sale or trade.
  8. Personal Finance

    A Broker's Open House Can Help You Sell Your Home

    This special type of open house can provide targeted marketing and yield expert advice.
  9. Investing

    Understanding The Case-Shiller Housing Index

    This index is a widely-used and respected barometer of the U.S. housing market and the broader economy.
  10. Personal Finance

    Home Sells at Highest Pace Since the Financial Crisis

    An inventory crunch is taking homes off the market more quickly and leaving buyers with only a few days to make an offer.
RELATED FAQS
  1. What economic indicators are important for investing in the wholesale sector?

    Understand what economic indicators are important for people looking to invest in the wholesale sector. Learn how a company ... Read Answer >>
  2. What is the average debt/equity ratio of companies in the wholesale sector?

    Learn about the standard debt-to-equity ratios in the wholesale sector, and discover some of the many subindustries in the ... Read Answer >>
  3. Is there a correlation between inflation and house prices?

    There is a correlation between inflation and house prices - in fact there are correlations between inflation and any good ... Read Answer >>
  4. What metrics can be used to evaluate companies in the wholesale sector?

    Find out which metrics are used for the analysis and valuation of wholesale distributors, and learn what makes a metric appropriate ... Read Answer >>
  5. What has the retail sector evolved to its current structure?

    Find out about the retail sector, the size of United States and global retail markets and why online retailers are changing ... Read Answer >>
  6. Is it possible to short sell real estate?

    The traditional idea of a short sale is selling something you don't have so that you can buy it back at a lower price. The ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center