Many people find themselves in the dilemma of whether to directly transact with the factory to get products or through the trading company.
Trading companies are often referred to as vendors. They mostly connect sellers and buyers with no strings attached to the development of the goods sold. They don’t add value, nor reduce it, they are simply agents. Most online stores assume this characteristic thus considered as trading companies. Some trading companies prefer being affiliated to one company while others will sell products manufactured by several companies.
As far as the quality and the price is not compromised with, many customers don’t really care if they are trading with the manufacturer or the trading company. In fact, some even aren’t sure whether they are contacting the manufacturer or not.
Investment Company is formed to simply invest. Awkward! This firm mostly buys investment products, assets and properties. A manager in Investment Company makes a decision of which assets to purchase in order to make a profit.
When an individual purchases share of an investment company, he or she creates a venture that forms a share of all assets under that company. This is the simplest way to expand the portfolio and reduce the risk by spreading it.
Bear in mind that you are not financing alone. Different people invest their money in that company, this makes you a shareholder. This makes it correct if you categorise an investment company as a collective investment fund.
Regardless of whether a business is trading or investing company, the bottom line is profit. So it is upon you to choose where to put your money in for again. However, many people prefer Investment Company due to shared risk that makes it safer. Trading companies also do well and sometimes can be run with very little capital, all you need to do is take goods from suppliers and send them to buyers.