{"id":823,"date":"2021-01-29T23:30:34","date_gmt":"2021-01-30T04:30:34","guid":{"rendered":"http:\/\/commoncents.blogwyrm.com\/?p=823"},"modified":"2021-01-31T08:10:15","modified_gmt":"2021-01-31T13:10:15","slug":"in-praise-of-the-middleman","status":"publish","type":"post","link":"https:\/\/commoncents.blogwyrm.com\/?p=823","title":{"rendered":"In Praise of the Middleman"},"content":{"rendered":"

The title of this blog says it all \u2013 this article focuses on praising the oft-maligned middleman.\u00a0 What isn\u2019t yet discussed is why anyone should defend or even laud someone who is often considered by society at large as superfluous and, sometimes, even parasitic.\u00a0 To understand this controversial position, let\u2019s first look at the conventional wisdom, take it apart a bit, and then see where the truth really lies.<\/p>\n

The usual mode of thought surrounding the middleman is best summarized by the following diagram. Over on the left is the manufacturer of the goods or services sought by the consumer.\u00a0 On the right are the consumers needing or wanting the goods or services that the manufacturer provides.\u00a0 Stuck firmly in between is the middleman, from whose position derives his name.\u00a0 In other contexts, the manufacturer might be the subject of economic criticism for his \u2018rapacious capitalistic ways that drive him to crush the worker and squeeze consumer\u2019 or the consumer may come under question for conspicuous consumption and not being enlightened enough to understand the implications of his purchases, for failing to \u2018think globally and act locally\u2019.\u00a0 But the presence of the middleman distracts from all of that and he usually seems to draw all the criticism.<\/p>\n

\"\"<\/a><\/p>\n

The reasons for this lack of status is well summarized in the article The Advantages of Eliminating the Middleman<\/em><\/a> by Neil Kokemuller from April of 2018.\u00a0 In this article Kokemuller identifies four advantages but a critical reader who eliminates the overlap soon finds that there are only two distinct ones.\u00a0 First, by eliminating some of if not all the intermediary steps, the manufacturer can realize a greater profit while the consumer realizes a cost savings.\u00a0 Basically, the two ends of the process split the cost that would have been expended on the middleman and bank it for themselves.\u00a0 Second, because there are fewer steps, the process is both economically wiser and more environmentally friendly as there are fewer scarce resources used on securing the transaction between manufacturer and consumer.\u00a0 The time from source to destination is also faster leading to higher customer satisfaction and reduced time to settle on the producer\u2019s \u00a0side.<\/p>\n

Kokemuller credits \u201cInternet expansion\u201d for this miracle release from the middleman, a sentiment more strongly (and perhaps humorously) expressed in the following excerpt from the written transcript of Steve Ely\u2019s sermon The Middle Man<\/em><\/a>:<\/p>\n

I despise the middle man! Don\u2019t look at me like that you do too! We despise him because he causes the price to go up. So we look for deals straight from the factory. We will go to factory direct stores to bi-pass the middle-man. We want to save a few bucks so we order through the internet in an attempt to get around the middle-man.<\/div>\n

Despite the fact that even a man of God has railed against the middleman, is this common wisdom really wise.\u00a0 The answer is a qualified no.\u00a0 Sure, each of us can point to a salesperson in some store (usually of the department variety) who is incompetent and\/or unmotivated, but do we really, roundly reject the concept of a middleman.\u00a0 Careful examination of our lives shows otherwise.<\/p>\n

Consider first the \u2018Internet expansion\u2019, by which Kokemuller presumably means the fact that the internet facilitates a many-to-many relationship between consumers and producers that effectively by-passes the middleman.\u00a0 The reality is that the middleman is not only thriving but now controls a larger portion of the economic pie than before.\u00a0 Afterall, what are Amazon, Ebay, and Etsy if not middlemen enterprises designed specifically to connect consumers with manufacturers within a common framework.<\/p>\n

In these cases, the primary benefit that these tech middlemen offer is convenience and trust.\u00a0 For example, within the Amazon marketplace ecosystem, a careful shopper can find the exact same goods offered by different sellers (middlemen of their own) at different prices.\u00a0 The structure Amazon provides makes payment to these individual institutions simple and convenient.\u00a0 So does the convenience of returns.\u00a0 The consumer need only interact with Amazon to purchase and return\/exchange and the seller only need interact with Amazon to deliver and to collect.\u00a0 This middleman function is so effective that it has made Jeff Bezos, the owner of Amazon, one of the wealthiest people in the world.<\/p>\n

Ebay works in similar fashion, and, like the Macy\u2019s, Kaufman\u2019s, and Gimbal\u2019s of decades past (mostly remembered through The Miracle on 34th<\/sup> Street<\/em> and the continued existence of Macy\u2019s as a brand), offers slightly different product lines than Amazon but all still presenting themselves within a common \u2018retail space\u2019.<\/p>\n

Curiously, Etsy seems to offer quite different product lines absent, for the most part, from the others, but, again, doing so within a common middleman framework wherein the consumer\u2019s purchases from the producer are mediated through a common framework.<\/p>\n

Other examples of middlemen on the internet abound.\u00a0 Hotels.com provides a middleman service between the traveler and their lodging-provider.\u00a0 Meta-middlemen like trivago (trivago even labels itself as a metasearch technology) or Kayak offer the middleman service of comparing individual middlemen side-by-side \u2013 for example, Hotels.com against its competitors.<\/p>\n

However, all is not rainbows and sunshine.\u00a0 Two things are lost, to varying degrees, with these cyber-middlemen services: traditional expertise and purchasing power.\u00a0 Trusted middlemen of the older days added value by being personally involved in the procurement process.\u00a0 They weren\u2019t just a convenient connection point for bundling transactions between many manufacturers and many consumers but they actively had reputations they protected by filtering out poor manufacturers, who passed off counterfeit or shabby goods and services and, conceivably, also filtering out poor consumers who had no intention of paying.\u00a0 After all, virtue is not the sole province of any side of an economic transaction.\u00a0 Along the way, these \u2018boutique\u2019 middlemen also offered purchasing power where they could negotiate a better price with the manufacturer that could an individual consumer.\u00a0 The relative scarcity of these type of intermediaries is probably the single biggest casualty of the internet age but it is a scarcity likely largely of their own making \u2013 very few people want to see trust and expertise it seems.<\/p>\n

And that is the real shame.\u00a0 Each of us would rather pay a little more for the peace-of-mind that comes when a trusted agent acts on our behalf in matters where we have little or no expertise.\u00a0 Doctors, mechanics, and construction contractors who follow this approach never lack for business and usually must turn opportunities away.\u00a0 Unfortunately, the internet has turned more of us into middlemen but hasn\u2019t increased the quality of the services provided but simply amped up the convenience in which they are delivered.\u00a0 Perhaps the only way that brick-and-mortar stores will substantially make a roaring comeback is by selling trust on a customer-by-customer basis.<\/p>\n","protected":false},"excerpt":{"rendered":"

The title of this blog says it all \u2013 this article focuses on praising the oft-maligned middleman.\u00a0 What isn\u2019t yet discussed is why anyone should defend or even laud someone... Read more ><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-823","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=823"}],"version-history":[{"count":2,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/823\/revisions"}],"predecessor-version":[{"id":826,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=\/wp\/v2\/posts\/823\/revisions\/826"}],"wp:attachment":[{"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commoncents.blogwyrm.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}