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. Wholesaling

    The sale and distribution of goods to users other than end consumers. ...
  2. Wholesale Banking

    Banking services between merchant banks and other financial institutions. ...
  3. Business To Business - B To B

    A type of commerce transaction that exists between businesses, ...
  4. Wholesale Trade

    An economic indicator that measures the value in U.S. dollars ...
  5. Housing Starts

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

    Debt securities issued by state or local governments to raise ...
Related Articles
  1. Investing

    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.
  2. Personal Finance

    Understanding Wholesale Banking

    Wholesale banking refers to banking services for merchant banks and other financial institutions.
  3. Insights

    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. Investing

    Why Housing Costs Shouldn't Exceed 30% of Your Budget

    Financial experts will argue that there’s no problem with allocating 50% of your net income to housing, but that barely leaves enough money for living comfortably. Reducing housing expenses to ...
  5. Managing Wealth

    4 Reasons Why the Housing Recovery Will Be Short-lived (LOW, HD)

    Evidence would suggest that the same culprits from 2008 and some new ones are re-inflating a housing bubble.
  6. Managing Wealth

    Top US Housing Market Indicators

    A quick overview of the top economic indicators to track the housing market in the US.
  7. Investing

    Real Estate Indicators For Prospective Homebuyers

    If you want to buy a home but you’re holding out until market conditions show signs of improvement, housing indicators can help point the way.
  8. Investing

    Why Housing Market Bubbles Pop

    Home price appreciation is not assured. Can you withstand the volatility in this market?
  9. Financial Advisor

    Are We Heading for a Real Estate Bubble?

    Housing prices across the United States have been on a steady rise over the past few years. Does this mean we are seeing another bubble?
  10. Investing

    What's the Balance of Trade?

    The balance of trade is the difference between the value of all the goods and services a country exports and the goods and services it imports.
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 >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center