Different kinds of middlemen

by • 10/06/2011 • B.COM PART 1 Introduction to BusinessComments (0)698

Q1- What do you know of middlemen? Explain different kinds of middlemen.


Middlemen are those traders who supply goods from producer to consumer. If the channel is direct, it has no middlemen and the producer and the consumer have direct link. Middlemen, however, are found if the channel is indirect.

Following are the different kinds of middlemen.

The broker is the agent of the principal. Most of the markets have brokers. These brokers may be from the buyer’s side or the producer’s side. The brokers are engaged on the basis of their knowledge about the market conditions. The brokers are paid for their services in the form of ‘Brokerage’ also called ‘Commission’.

Forwarding Agent:

Forwarding agent are the firm which acquire special skill in collecting goods from the senders of the goods any carrying them to the agency of goods carrying. The remuneration of the forwarding agent is paid in the form of commission or the fixed amount which ever is determined.

Commission Agent:
Commission agent is the form or individual who buys or sells on the basis of commission. Commission agent sells the goods of his principal and purchase the goods for him. Distinction between the commission agent and the broker becomes necessary at this stage. Broker is the party between the buyer are seller but the commission agent also takes the goods in his possession.

Banks And Insurance Company:
Banks and insurance companies are also included in the middlemen. Both these institutions do not participate in buying or selling directly but assist in the distribution of goods. For example, the bank provide credit facilities to the principal buyer and they pay on behalf of the buyers. Representing the seller, the banks receive the payment from the buyer.

The auctioneer, for the sale of the goods of his principal, adopts the method of auction. An auctioneer has the stock of the goods for his principal sellers, displays them to the prospective buyers and then he invites the bids on the goods from them. The auctioneer makes the publicity of the goods to be auctioned on the large scale so that he could have the high bids.


Merchants are the traders who join at any stage of transfer of the goods from manufacturer to the consumer. These merchants get the tile of ownership of the goods from the manufacturers and sell them ahead.

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