The middleman in a business

Middleman is the people who are in between the producers and the consumers. They will play an intermediate role between them.  They are specialized in the activities between the buyer and the seller. The producers will see them as an extension of their business because they will do whatever needed to sell the products to the ultimate buyers. They will reduce the work of the producers. They are divided into two categories and they are as follows.

  1. Merchants
  2. Agents

A merchant will usually buy the goods from the producers and resells it to the people whereas an agent will negotiate the purchase or sale of the products. Sometimes they both will not buy the goods from the producers.

The difference will be based on the title of goods. If they do it, then they are the merchants and if they don’t, then they are the agents.

Importance of middleman:

The middleman plays an important role in buy and sells the business. Because they are the ones who mainly helps both the producers and the consumers. But, sometimes, they will do some fraudulent activities for the sake of them. Without the middleman, it is difficult to run a business because, in many villages, the producers will not have contact with the people. So, at that time, the businessman will obviously need the help from the middlemen.

Types of middleman:

There are many types of middleman and let us look at those types one by one here.

  • Merchant middleman
  • Fundamental middleman

The merchant middleman is categorized into two, wholesaler and retailer. The fundamental middleman is divided into two, mercantile agent and negotiating agent.

Wholesaler:

A wholesaler may be big or small, it depends on the products. The wholesaler is the one who supplies goods to the retailers and they will sell the goods for a less amount to the retailers.

Retailer:

The retailers are the ones who purchase goods in a bulk quantity from the wholesaler for the less amount and they will sell it to the people with some profit. The retailers are again classified into two types, itinerant and fixed retailers. The itinerant retailers include hawkers, market traders, street traders, and peddlers. The fixed retailers may be small scale or large scale. There are many trading software available in the market. But, we should check whether is it a safe software to use it.

The mercantile middleman is categorized into brokers, underwriters, commission agents, forwarding agents, etc…The facilitating agent id divided into banking, insurance, transport, and warehousing.

Conclusion:

Thus conclude that middleman are the ones who are like a bridge that connects the sellers and the buyers. So, every business needs a middleman to face a great profit to reach greater heights in the market.