January 30, 2024

An Intermediary Who Functions Much the Same As Wholesalers Do For Consumer Goods

A person who acts as a go-between for others is called an intermediary. The grocery store you shop in and the malls you visit are examples of intermediaries. The term is also used for business-to-business transactions, such as a mediator between two companies at odds over a contract or a divorced couple in custody negotiations. Intermediaries are valued for their skills, knowledge and networks – all of which they get paid on a commission basis to possess.

Intermediaries function much the same for consumer goods as wholesalers do for bulk products. Essentially, they buy in large quantities from manufacturers and break down the products into smaller units that retailers can sell to consumers. This allows the manufacturer to meet consumer demand while reducing storage costs and delivery times.

In other cases, intermediaries offer value-added services to their customers. For example, an intermediary might assemble the components of a tool for customers, which saves them time and money. Another common service is accompanying a vulnerable customer through the sales and distribution channel. This might involve helping a disabled person take notes, using simplified language and reviewing documents with them.

Intermediaries are an important part of any sales and distribution channel. Market intermediaries – including agents, wholesalers, retailers and distributors – help companies promote their products and distribute them to consumers. Financial institutions like banks may also act as intermediaries by preparing loan packages for small and medium-sized businesses that they don’t have the resources to manage themselves.

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