An online trading company is a trading company that primarily operates through the internet and its e-commerce tools. Like any normal trading company, online trading companies specialize in buying goods from manufacturers and reselling them to consumers or other retailers. However, the online nature of this business makes it different and has specific advantages and limitations. Selling goods online offers tremendous opportunities and benefits that allow you to trade worldwide and save on organizational and administrative costs such as wages, office rents and others.
The main difference is that a 100% online trading company (with no physical stores, just head office and warehouse) needs virtual instead of physical infrastructure. An offline trading company needs offices, stores, storage rooms and a logistics network that connects suppliers, offices and points of sale; An online trading company needs offices, storage rooms, powerful servers and websites as well as a flexible logistics system to serve customers in many locations.
As you can see, online retailers require less physical infrastructure, but they also need to be much more flexible to serve their customers. In addition, a website is a useful addition to a regular trading company, but an indispensable tool for an online trading company, without which the company cannot function - hence the high demands on 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 buy goods from a manufacturer and resell them to dealers and consumers. A secondary but essential task is the delivery of the goods to the customers, since online trading companies usually do not lack any physical infrastructure such as shops, outlets and other sales points.
In order to buy and sell goods, an online trading company needs to set up a hub for the transfer of products from manufacturers to customers. In this case, that hub is a website. Just as a physical shop requires designers and marketing specialists to optimally arrange and present products, a digital shop also needs specialists who guide the customer through the possible purchase options.
When delivering goods, an online trading company can either set up the delivery network itself or outsource this task by concluding a contract with a logistics company. The online trading company then hands over its goods to the logistics company, which takes care of the delivery of the goods via its own network.

Important aspects of online trading
Although the goods or services sold by online trading companies may vary, there are some similarities due to the specific way in which these companies market and sell their end products. Here are some of the main problems you will encounter regardless of what you are selling online.

Distance selling
EU distance selling is a special category of online trading. E-commerce has made tremendous strides in Europe and the online market is growing every year. However, every retailer needs to understand the VAT implications of e-commerce in the EU. Completely different VAT regulations apply to online sellers. For example, there are different thresholds for VAT registration (e.g. £ 70,000 for UK, € 35,000 for Poland or Italy, € 100,000 for Germany). There is no minimum threshold for digital, electronic and broadcast service providers to charge VAT at the rate established by the country in which the consumer is resident.
Online stores and websites

Of course, having a website is an absolute must for any online business. Conceived as an online shop (description of the available product range, prices and features), the website must also contain the following important sections:

Delivery and return policy
Contact page with phone number, address, email address, and other contact information that consumers can use
Online payment options
Online payment solutions
One way to accept online payments is by far the most important consideration for an online business. Your consumer must have a way to instantly and securely pay for your products and services. There are two basic ways to accept payments in your online store:
By using an online payment system, for example PayPal
By using a merchant account to accept direct credit card payments
A merchant account is a special bank account that is opened for online business purposes to enable secure transactions between merchant and customer. Merchant accounts are set up by agreement between the bank and the merchant and allow you to accept payments in many ways, usually by credit or debit card. Banks aren't actually the only institutions that can set up merchant accounts; this can also be done through other financial services companies that process credit card payments.

Registration of an online trading company

Since an online trading company does not differ from a regular trading company in the legal sense, the registration process is almost identical.

First you need to register a company. Since a trading company is primarily characterized by the type of its activity and not by its legal form, the first step here, as with any trade, is the registration of a company. This includes all the necessary start-up procedures such as tax registration, registration for social security, etc. In the EU, all goods imported from other EU member states are classified as goods of free circulation and are not subject to any customs procedures or extensive documentation requirements. In other countries it can be more difficult, e.g. a trading company in India has to register with the competent authorities for an importer-exporter code.
In addition, a trading company must acquire the relevant trade licenses if the relevant jurisdiction has restricted the sale of the goods it intends to sell. For example, most countries have certain restrictions on the sale of alcohol and tobacco products. It is especially important to look for restrictions on foreign owned companies as they may require separate licenses to trade in a particular jurisdiction or their activities may be restricted in other ways.