Roles of middlemen

Business studies study module

The following are some the roles performed middlemen in the chain of distribution

  • Bulk accumulation (assembling). They similar goods from different producers in small quantities and then offering the large amount gathered to buyers who may want to buy in large volumes.
  • Reducing transactions. The interactions between the producers and the consumers will be reduced since the middlemen are the ones who will be communicating to the consumers.
  • Bulk breaking. They buy in large quantities and then sell in small quantities as desired the consumers.
  • Risk taking. They assume all the risks related with the movement of goods from the producers to the consumers. Such risks include theft, damages, loss due to bad debts.
  • Finance provision. Middlemen provide finance to the producers buying goods in large quantities and paying for them in time.
  • Provision of information. Middlemen gather market information from the consumers then pass to the producers who in turn produce goods in line with the tastes of consumers.
  • Marketing/product promotion. Middlemen are involved in marketing of goods hence stimulating the interest of consumers.
  • Provision of transport. Middlemen do transport goods from the producers up to the where the consumers can access them. Both the producers and consumers are hence relieved of transport costs.
  • Storage
  • Variety provision
  • Availing goods to consumers

(Visited 97 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published.