Middlemen – College Essay Example

assistance, as well as provide information and education about both new and old products (Sings 2012). Additionally, retailers provide valuable news and reports to wholesalers and manufacturers.

Wholesalers act as intermediaries by purchasing a large amount of merchandise from various companies and dealers. They keep these products in warehouses. Due to importing products from around the world, there is often a significant time gap between production and consumption by wholesalers (Biomass 010,196).Producers often prefer wholesalers as they can easily make large sales to a smaller number of buyers. Wholesalers distribute goods in bulk, making them a preferred choice for many retailers who have more options (Reed 2007, 188). The text discusses the concept of direct distribution, where manufacturers sell their products directly to customers. This approach allows for product customization and convenience. Examples of companies implementing this strategy include Apple, McDonald's, KFC, and Pizza Hut. Direct distribution is known for its efficiency in fast business transactions compared to indirect methods. The internet has played a significant role in facilitating global market reach and direct sales. In contrast, indirect distribution involves intermediaries between producers and consumers without direct interaction between them. There are three types of indirect channels: selling through retailers, involving both wholesalers and retailers as intermediaries, and utilizing the longest available distribution channel. Indirect channels are commonly used for garments, food products,lubricants,and gadgets.The producer sells merchandise to a selling agent who then assigns it to wholesalers.These wholesalers subsequently sell the goods to retailers who ultimately sell them to end users.The use of this channel simplifies product distribution for manufacturers by allowing them to focus on production. However, it also creates distance between manufacturers and end

users, resulting in slower product distribution due to middlemen. Nevertheless, eliminating intermediaries has numerous benefits that can reduce costs: cost savings, efficiency improvement, decreased environmental impact, and better value.

By utilizing the internet and selling directly to the end customer, businesses can save money as they no longer require sales agents to increase product sales with retailers. Instead, they can now sell products through their own web pages. This enables businesses to take orders and ship products directly to customers without intermediaries taking a gross profit. Consequently, certain phases in the distribution channels are removed which reduces logistics and shipping needs and increases efficiency.

Producers have the ability to eliminate wholesalers more quickly while providing merchandise promptly through web pages sent directly to consumers after purchase. The elimination of intermediaries in the distribution process offers multiple benefits for businesses and the environment. Customized orders receive faster feedback times leading to increased customer satisfaction and sales prices.

Moreover, removing intermediaries also contributes towards reducing air pollution by decreasing the number of trucks required for transportation as well as travel time needed to ship goods.The environmental advantage has enabled local farmers to directly sell fresh products to consumers, which enhances market freshness and reduces spoilage due to shipping delays. Nonetheless, the process of selling products through intermediaries is time-consuming and expensive. This leads to higher product prices as manufacturers rely on middlemen for sales and agents for advertising, who then distribute the products to wholesalers that store them in warehouses until retailers buy them. Additionally, including representative costs during manufacturing further impacts product prices. Overall, it is believed that eliminating middlemen or intermediaries would result in cost savings for consumers

(Quitter Marketing Efficiency n.D).