Middleman Person

Middleman Person

Middleman, a person who intervenes in the process of purchase and sale either between the primary producer and the manufacturer or the manufacturer and the final consumer. In economics the middleman came to be regarded as a crucially important part of the competitive process; for he performed the specialized function of linking the producer with a market demand that was becoming increasingly distant in time and space. By specializing in this task, the middleman could do it more efficiently and cheaply than others. Moreover, in buying from the producer in anticipation of a sale and in carrying stocks of goods from place to place or through time he was taking important marketing risks, thus easing the burden on the manufacturer. In different industries he is a merchant, dealer, agent, broker, wholesaler and retailer.

In the Middle Ages the middleman was traditionally regarded as an interloper and was frequently abused as a parasite who forced his way between producer and buyer to reap an unnecessary profit. The poor transport and communications of Western Europe in the fifteenth and sixteenth centuries created conditions that sometimes justified this view, since merchants often exploited their monopolistic position.

From this attitude developed the mass of legislation against 'engrossing, forestalling and re-grading in fifteenth- and sixteenth-century England.

Especially since the beginning of the twentieth century marketing and distribution as distinct from production itself has become more elaborate in western economics. The improved quality of many goods and the development of advertising and marketing techniques largely explain this development. But the vogue of the proprietary article and branded good has encroached on the role of the old-style middleman. In retailing he has increasingly been supplanted by the chain store. In the wholesale market he has been supplanted either by the manufacturer expanding 'vertically' to control directly the purchase of materials and the disposal of his product, or by co-operative organizations selling on behalf of producers

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