"Cut out the middleman!", we often hear. Usually, that phrase is targeted to buyers, and comes with a discount price on the product being advertised. But, should you, as a business owner, cut out the middleman? Is there some reason why you should LOVE your middleman?
Most product manufacturers could sell directly to buyers, but they prefer to deal with middlemen retailers instead because the retailers take care of finding customers for them, while manufacturers focus on their products. If the manufacturers started selling directly, they make their products less attractive to their retailers, and they jeopardize their business model.
If you've got a successful product to sell, chances are you're really good and making that product. Are you good at finding customers for your product? Even if you are, if someone else did it for you, would you save enough time to be able to produce even BETTER products? Or how about this: with some hardworking middlemen selling your products for you, could you drop your prices, increase your market share, and then edge out your competition while making more MONEY, all at the same time?
If you're a very small startup business, maybe you can't get the attention of middlemen, and so you're forced to find customers yourself. What about when you're starting to do well?
That's when you need middlemen. When your products are selling, you're making money, and you're wondering what to do next, go start talking to distributors and retailers about selling your products. Instead of selling a few products to thousands of individuals, you may sell a lot of products to just a few middlemen who are expert at handling millions of individual customers. Middlemen must increase the efficiency of businesses, or nobody would use them.
So how many middlemen are there? What exactly is a middleman anyway? Look around you. Pretty much any retail store in your neighborhood is a middleman company. None of them make anything - they're not manufacturers. All they do is sell stuff, and free up the manufacturers to focus on manufacturing.
What if you're not a manufacturer? Lets say you're a photographer, for example. Do you need a middle man? You bet! There are many stock photography companies that will sell your photos for you, freeing you to focus on your trade.
What if you're a news agency? Who's your middleman? Bloggers! That's right, even big companies need middlemen sometimes. When a large media outlet publishes a news article, the article doesn't become a money-maker until lots of people are reading it. The best way to do that is leak information to bloggers in advance so they'll all be talking about your article as soon as it goes live.
So, no matter what your business is, chances are you can benefit from some sort of relationship with a middleman. You'll be able to focus on high quality in your company, while the middlemen take care of the details of marketing your products.
By the way, the image in this article came from
stock.xchange, a free stock photography website. I have unwittingly become a middleman, doing the marketing for the photographer who took that photo.
