Sogo shosha

Sogo shosha (総合商社, sōgō shōsha) means general trading companies, Japan's unique business, that trade a wide range of products and materials. Not only act as a trading house, they also function as investment bank, private equity, etc.

The seven largest are Mitsubishi Corporation, Mitsui & Co., ITOCHU, Sumitomo Corporation, Marubeni, Toyota Tsusho and Sojitz. They collectively maintain approximately 1,110 offices in over 200 cities around the world and employ more than 20,000 highly-trained specialists who each average more than fifteen years of trading experience.

Sogo shosha deal in general commerce. On one end, they supply large volumes of raw materials goods from large manufacturers or wholesalers to smaller distributors and to numerous small retailers. On the other end, they act as an international sales force for medium and small sized companies who do not have ability to market and maintain distribution channel overseas. They also often act as the linchpin of large consortium contracts ranging from the building of large shopping malls to railway or property projects, coordinating the activities of banks, construction and logistic companies.

What makes them unique is their size, scope, information-gathering capabilities, and functional diversity. A sogo shosha is an economic organization whose functions consist of minimizing the risks involved in transactions through its ability to distribute the risk; reducing transaction costs through its ability to take advantage of economies of scale; and making efficient use of capital. They are Japanese traders, existing at the center of Japan's global economic efforts, and serving as intermediaries for half of their country's exports and two-thirds of their imports.

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