Who, do you think, makes most of the money from the least effort from selling fruits, vegetables, milk, and meat?
Farmers, who work day and night on their land? Wrong!
Gardeners, who take care of their fruit apples, prune them regularly and fight pests? Wrong!
Maybe, those who breed cows and pigs? Wrong again!
Then who? Middlemen!
What does a middleman do?
Who is a middleman, and who does he do? Here is an image:
Let’s say, there are three farmers:
● Bob grows apples;
● Jack grows pears;
● Chuck breeds chicken and sells eggs.
They have a product, and they would be happy to sell it all in one go to a local factory that produces juices, candies, and apple pies. But the factory refused to cooperate with them because it works only with wholesale suppliers.
This is when Joe, the middleman, comes into play. He signed a contract with the factory, according to which he has to deliver five tons of apples, ten tons of pears, ten thousand eggs and 5 tons of chicken meat every month.
There are no farmers in this town who could deliver such large quantities of products. So they all sell what they produce to Joe, the middleman, and he sells it to the factory.
Basically, this job is easy: buy it retail at a lower price, sell it wholesale at a higher price. Typically, a middleman can make as much as 10-50% per one sale.
You have to:
● Sign a contract with a factory or a plant;
● Agree on the purchase of goods with farmers;
● Take out the goods yourself, or take them in your warehouse.
The moral side of the issue
While a lot of people think that all middlemen are bad, in reality, they do a good job: they connect people. If in our case Joe, the middleman didn’t exist, Bob, Jack, and Chuck wouldn’t be able to sell their goods to a factory and make money.