Why middlemen make more profit than the producers/manufacturers.

[Niyi Briggs]

Middle men often make more profit than producers because they are able to take advantage of the price difference between the producer and the consumer. They buy goods from producers at a lower price and then sell them to consumers at a higher price, thus earning a profit.

This is known as arbitrage. In addition, middle men may also provide valuable services such as distribution and marketing, which can justify a higher profit margin. It's important to note, however, that not all middle men are able to successfully take advantage of this opportunity and some may even operate at a loss.

 

[gammarays]

Well middlemen can make as much profit as they want even more than the main dealers because they don't do much expenses.

 

[puroypoi]

I can see myself from the description you have written there above, but since I am new in this kind of business where I acted just like a middleman, I cannot tell yet that I profit more than the producer can.

 

[gammarays]

I can see myself from the description you have written there above, but since I am new in this kind of business where I acted just like a middleman, I cannot tell yet that I profit more than the producer can.

It might not be the same with the producer. However in some cases, since the producer makes most of the expenses, their profit may be reduced.

 

[Passiveearner]

I do not think that a middleman necessarily makes more profits. Many big manufacturers generally make more profits more than middlemen.

 

[gammarays]

It's just like land or property agents. Some of them make insane profits even though they didn't invest a dime in the structure. That's why everyone is becoming an agent.

 

[Niyi Briggs]

I do not think that a middleman necessarily makes more profits. Many big manufacturers generally make more profits more than middlemen.

You don't understand how business works my brother. It is true that middlemen make more profits than producers. A middle man would come and take a profit on all items sold when he does not contribute anything to the production.

 

[flower]

The middleman does not insure any expenses in the production process all it does is to make necessary distribution and make his profit.

 

[Shavkat]

They are part of the business. It is a win-win situation in so many factors. I am sure that it cannot be controlled because it is their way to gain profit.

 

[cherry123]

Well middlemen can make as much profit as they want even more than the main dealers because they don't do much expenses.

I think so, they just need to bring buyers and sellers together and make their money and that's it.

 

[IB D]

Middlemen have mastered the art of marketing and pricing. You also have to consider that they are the ones who are in the market all the time, they know how to manipulate it to their gain.

 

[Etini Willie]

Middlemen understand the market behaviors more than the producers. They know products that are in demand and how much the demand is. They know how to box the producer to sell at their own price so they can make good profits.

 

[Niyi Briggs]

Middlemen really deal with us in the agricultural sector knowing that our products are perishable and we need to sell as quick as possible. I add value to my products and sell directly to retailers or consumers.

 

[Heatman]

Middle men often make more profit than producers because they are able to take advantage of the price difference between the producer and the consumer. They buy goods from producers at a lower price and then sell them to consumers at a higher price, thus earning a profit.

This is known as arbitrage. In addition, middle men may also provide valuable services such as distribution and marketing, which can justify a higher profit margin. It's important to note, however, that not all middle men are able to successfully take advantage of this opportunity and some may even operate at a loss.

One of the reason why middlemen makes more money than the producers is that sometimes they even sell to the last or final consumer at a higher price which help them to make more profit.

 

[hastral45]

It is possible for middlemen to make profits as a result of additional values added into it such as repackage, labeling etc. Middlemen may also create artificial scarcity in the markets by hoarding the products in their warehouses.

 

[cherry123]

Again, middlemen can make as much profit as they want even more because they sell in bits which would bring more profit than selling in bulk with less profits daily

 

[Springtime]

That depends on the responsibilities of the middleman. If s(he) is just doing a referral, the commission they make may not be very high. If they also need to do marketing, after sales support, they can sell the product at a higher price. But they also have to bear the costs of marketing and providing support.

 

[Blessed19]

This is something that I get to actually think of a lot of the time as I is with those who help in the conversion of gift cards gifted to others as vendors make more money to those who are actually gifted the cards.

 

[cherry123]

Middlemen sell at a higher price and might make more money as they add more values to the products via repackage, labeling and others. This will help to lure more people to buy

 

[astutimeliana723]

Middlemen can make more profit than producers because they are usually the ones who play the price in the market. Therefore, to avoid unfair competition among traders, producers set the highest retail price.