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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 enormous 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 headquarters and warehouses) requires virtual rather than 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 trading companies 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 Naturally, a website is an absolute must for any online business. Designed as an online store (describing the range of products available, their prices and features), the website must also include the following important sections: Delivery and returns policy Contact page, with a phone number, address, email address and other contact information for consumers to use Online payment options Online payment solutions A way to accept online payments is by far the most important consideration for an online business. Your consumer must have a way to pay for your products and services instantly and securely. There are two basic ways to accept payments on 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 opened for online business purposes, in order to facilitate secure transactions between merchant and customer. Merchant accounts are set up by agreement between the bank and the merchant and they allow you to accept payments in many ways, usually by credit or debit card. Banks are actually not the only entities that can set up merchant accounts; this can also be done by other financial service companies that process credit card payments. http://www.confiduss.com/en/services/incorporation/purpose/online-trading/
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