Types of Intermediaries

Meaning of Intermediaries:

Intermediaries are an individual or a company who behave as a middleman between parties for an investment deal, business deal, negotiation, insurance, etc. These are commonly known as a consultant or a broker and are specialised in one specific area having all the necessary information. They give all the required information about a product to the customers and also streamlines a company’s processes. In other words, intermediaries are third party agents or individuals between parties for a specific deal.

Types of Intermediaries:

The 4 types of traditional intermediaries are as follows:

  • Brokers and Agents- Both the intermediaries sell products and services on a commission or percentage basis. They are legally appointed to impart information about a product to the customers on behalf of the manufacturer or producer, but never take ownership of the product sold. The key function of these intermediaries is to bring buyers and sellers together to make a deal. For example, an insurance or real estate agent gets a commission for their service or a sale, but do not take ownership.
  • Wholesalers and Reseller- They typically buy goods from the manufacturer in bulk and resell them to the retailer or other businesses. They are an independent businessman and take ownership of the products purchased from the manufacturers or producers. Some wholesalers also provide services such as order processing, storage, delivery, and participate in promotion as well.
  • Distributors- The distributors are selected by the manufacturer to distribute their products to the wholesaler or resellers in different locations. The distributors are involved in many businesses and cover many geographical areas. Few services distributors offer to the wholesalers are delivery, maintain inventory, extend credit, etc.
  • Retailers- The retailers are the mediator between wholesaler and customers. They purchase different goods from the wholesaler and sell them to the ultimate customers in small quantities from one place.

The above mentioned is the concept, that is elucidated in detail about ‘Types of Intermediaries’ for the Commerce students. To know more, stay tuned to BYJU’S.

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