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  • Category: Miscellaneous

    Is business possible without middlemen?

    The manufactured or produced product goes to the market through many agencies like distributors, authorized agents, and retail sellers. In some cases, it may be possible to sell the product directly to the consumer. In general, there will be middlemen through which the product will be available to the consumer. The manufacturer at times may get direct orders and sell the product but such a possibility is not there for all types of products. The main job of the manufacturer is to gather men, machinery and the materials to produce a finished product. The selling of the product goes through middlemen. All these middlemen take a profit and the product cost for the consumer will be more than the manufactured cost. In these circumstances, is it possible to avoid middlemen completely? I personally feel middlemen are required for any business to flourish. The countries are also engaging the services of agencies to promote their country's interests in the international arena.
    In my opinion, middlemen are essential for business house whether big or small to flourish. Members, what is your opinion on this?
  • #711648
    Small businesses can be carried out without middlemen. For example, a small farmer can sell his product directly to the customer. But some facilities are required for that. The former Chief Minister of Andhra Pradesh, Chandra Babu Naidu brought Rytu Bazaar concept with this idea only. A farmer can bring vegetables and products cultivated in his fields can be brought by himself and sell directly to the consumers. But I don't know how much success is this concept?
    But big businesses can't be carried out without middlemen. If the manufacturer has to sell the products on his own, he has to have a very wide network across the Globe. That will be very costly and the company may not be able to sell. So they will take help of the middlemen. In some cases, the middlemen may be making more money than the manufacturer.
    But the manufacturer may not suffer. But the consumer has to pay for it. Sometimes the manufacturing cost of the product maybe even less than 50% of the selling cost. I know companies who are giving almost 25% commission to the middlemen. But they can avoid it.

    always confident

  • #711649
    When the market is disorganized the need of the middle men was essential. Now the government has created new way of life for the farmers and producers of product to sell the same through direct way of marketing and thus the need of the middleman is completely withdrawn and the profit that was going to the middleman can now be shared between the producer and the customer. For example a tomato would be procured by the middleman at the market yard at rupees five per kg. And he will sell the same at 10 per kg to the retailers who sell the same either through push cart or other methods. When the actual purchase is done by the customer the price would be more than 20 depending on the demand. So the farmer or the producer was losing 15 in the melee and now he can part with five to 10 rupees as discount to customer and he earns five rupee more per kg.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #711656
    A small manufacturer need not have any middlemen or agent to sell their products. They can do it on their own. But big manufacturers need to have agents to sell their products. The agents should be under the control of the manufacturers. The manufacturer will fix the cost price, and the agents will get a commission for the sales.

    But the middlemen who is not under the control of the manufacture,r buys the products at cheaper rates and sell it to the customer with high profits. So we can avoid middlemen who sit and earn heavy money.

    The middlemen are mainly for the Agri products who fix the rates. They get the products at cheaper rates by sitting in one place in the mandi and sell it to the customer from the same place with huge profits without any movement. The manufacturer suffers with transporting, loading and unloading charges, whereas the middlemen sell the products without any transportation, loading and unloading charges which is bearable by the customer.

    I like the term authorised agent than middlemen.

    I strongly recommend one agent for every village to deal with the products of his own village. He should be educated and should know about collection and sale. What is required is cooperation of the farmers. We can avoid the middlemen completely, and farmers won't lose their money. Ultimately, the end users will also be benefitted with less price.

    No life without Sun

  • #711657
    It is a difficult proposition to think so as the business house would never be interested to take that headache of dispatching items to each and every customer in the country. So some dealers or middlemen are required and without them it is not practical to do so. The big portals like Amazon and Flipkart etc are nothing but are digital middlemen for selling various items. The seller does the transaction through these platforms as many customers come there and in the process the portals make money just like middlemen are making outside.
    Knowledge is power.

  • #711663
    As business becomes more organized and formal. The need of middlemen slowly vanishes. Yet they are a common thing even today. Since a large sector of our economy is still informal. They still form an integral part of the value addition in the chain of economic development.

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