The port of Melaka, on the southwestern coast of the Malay Peninsula, was founded around the turn of the fourteenth century, and it continued the tradition of a previous regional power, Srivijaya, in ensuring the success of international trade. It owed its success to a number of factors. In the first place, it was generally able to guarantee the safety of its sea lanes. The rulers of Melaka, like those of Srivijaya, commanded the allegiance of various Orang Laut groups (nomadic sea peoples) who protected Melaka's clients and attacked ships going to rival ports. These safeguards (and the threat of attack for those who passed by Melaka) were an important element in the decision of traders to frequent the new settlement in preference to other ports in the region.

Secondly, Melaka was attractive to traders because of its commercial facilities. High priority was given to security within the town and to the protection of foreign merchants and their goods. For example, underground warehouses were constructed where stored goods would be less vulnerable to fire, damage, or theft. Such measures were necessary because departures, arrivals, and the exchange of goods were all governed by the monsoon winds (the seasonal wind of the Indian Ocean and southern Asia). Between December and March, the period of greatest activity, vessels reached Melaka from western Asia and the Far East; it was not until May, however, that ships from Java to the south and the eastern Indonesian archipelago (chain of islands) began to arrive. All traders, especially those from China and eastern Indonesia, had some time to wait before the change in monsoon winds made their homeward voyage possible. Secure storage facilities were therefore a significant factor in Melaka's ability to attract international clients.

Third, and most important, was Melaka's efficient legal and administrative machinery, which provided predictability essential for the long-term plans of foreign traders. The Undang-Undang Melaka, the first code of laws in the Malay world, devote considerable attention to the regulation of commercial matters. A separate codification of maritime laws concentrated specifically on matters concerned with sea-going trade, such as the collection of debts, shipboard crimes, and the duties of a captain and crew.

Melaka's administrative system also directly responded to the needs of a growing trading community. Four syahbandars, or harbor masters, were appointed, each one representing different ethnic groupings. Each syahbandar was required to oversee the affairs of his particular group; to manage the marketplace and the warehouse; to maintain a check on weights, measures, and coinage; and to adjudicate in any disputes between ship captains and merchants. The ruler of Melaka was the final arbiter who settled all quarrels between the different trading communities. Whenever a ship arrived in port, the captain reported to his particular syahbandar, who in turn referred him to Melaka's principal minister the bendahara. The syahbandar then supplied elephants for the captain to transport his cargo to a warehouse assigned for the temporary storage of his goods. Before trading could be conducted customs duties were paid in accordance with the value of the merchandise and the area from which the trader came. In addition, it was necessary to present gifts to the ruler. the bendahara, and the temenggung (the Melaka official principally involved in the collection of import and export duties), as well as to the appropriate syahbandar

Melaka's reputation for security, a well-ordered government and a cosmopolitan and well-equipped marketplace all attest to the priority its rulers placed on creating the conditions for safe and profitable commerce. But these facilities alone would not have automatically attracted traders. The fundamental element in Melaka's success as a storage and distribution center was the dual role it played as the principal collecting point for spices such as cloves, nutmeg and mace from islands to the east and as an important redistribution center for Indian textiles. Indian cloth was carried mainly by Malay traders from Melaka to various parts of the archipelago and exchanged for spices, aromatic woods, sea products, and other exotic items highly prized by traders from both East and West. Without the spices from the eastern islands and the Indian cloth, Melaka would have been simply one of a number of other ports in the area specializing in a few local products.