Trading post

A trading post, trading station, or trading house, also known as a factory in European and colonial contexts, is an establishment or settlement where goods and services could be traded.

Typically a trading post allows people from one geographic area to exchange for goods produced in another area. Usually money is not used. The barter that occurs often includes an aspect of haggling. In some examples, local inhabitants can use a trading post to exchange what they have (such as locally-harvested furs) for goods they wish to acquire (such as manufactured trade goods imported from industrialized places).

Given the expense incurred by transportation, exchanges made at a trading post can involve items which either party or both parties regard as luxury goods, especially lightweight high-priced items or goods that one side values more than the other due to local availability. Beaver pelts were commonly available in the old West where they had about the same utility as other animal skins, but in England they were specifically prized and uniquely useful for the hat-making industry.

A trading post can consist either of a single building or of an entire town. Trading posts have been established in a range of areas, including relatively remote ones, but most often near an ocean, a river, or another source of a natural resource. A prominent geographical location and the head start provided by an early trading post ensured that trading posts feature in the history of many of today's cities.