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[[File: Vologases_V.jpg|300px|thumbnail|left|Silver Coin of Parthian King Vologases V (Ruled AD 192-208)]]

When it came to economics, the Parthians were the beneficiaries of a favorable geographic location. The Parthians were not known for being particularly excellent merchants the way other ancients peoples such as the Phoenicians and Palmyrenes were, but they controlled the lucrative caravan routes that snaked their way through central Asia, connecting the early Western and Eastern worlds. These caravan routes would collectively become known as the “Silk Road.” The most important early contacts the Parthians made were with the Chinese when in 121 BC the Emperor Wu of the Han Dynasty sent an embassy to Mithridates II (reigned 124-88 BC) to establish formal relations between the two empires. The Chinese knew the Parthians as “An-Hisi” and were particularly interested in developing an alliance with the martial-minded central Asian people and to gain access to their horses, which could be used to combat nomadic hordes. <ref> Brosius, pgs. 83-90</ref> Parthia’s trade with China had the combined effect of opening diplomatic relations with the Han Dynasty and also the emergence of the Silk Road.

Although the Silk Road had been in operation in some form before the Parthians, the Parthians established a control over the road that allowed them to collect sizable profits from the nascent silk trade, which they then used to fund their military. After the Chinese established control over the Tarim Basin around AD 90, silk merchants from northern China only had to pass through four kingdoms: China, Kushan, Parthia, and Rome. The Parthians were able to charge a hefty tax on silk passing through their kingdom from China, which was then processed in Roman territory. Interestingly, the raw silk that made its way into Rome was rewoven in factories in Syria, where it was then made into the brocade that is associated with silk today. From there the finished silk would make its way to Rome proper and ironically back east to China. <ref> Thorley, J. “The Silk Trade between China and the Roman Empire at Its Heights.” <i>Greece and Rome</i> 18 (1990) pgs. 73-77</ref> The Parthians profited twice from their position; first by charging the raw silk to pass through their kingdom to the west and then when they charged to send the finished silk back through their kingdom to the east. The caravans went through the Parthian city of Merv daily and could be quite large – a single caravan could include up to 1,000 Bactrian camels with each camel carrying 400 to 500 pounds of goods. <ref> Brosius, p. 123</ref> Once the Parthian kings received their cut of the profits from the trade, they reinvested much of it into their state of the art army.