The underwriter performs the function of protecting the company's initial public offering in contrast to the failure of the issued stock to the common public.Wiley is a global provider of content and content-enabled workflow solutions in areas of scientific, technical, medical, and scholarly research professional development and education. Underwriters – Underwriters are the middlemen who undertake the responsibility of stocks and financial assets in the financial market. The factor collects the receivables from the sundry debtors on behalf of the company. These agents also facilitate customers by organizing tours and trips.įactors – A factor is a person who is an intermediary or middleman between the company and its debtors. They engaged in the function of transporting the goods. Traveling Agents – A traveling agent is an intermediary who arranges the facility of transportation to the sellers or producers. The bank bears the risk when the physical goods are transferred from the seller's place to the buyers' place. Insurance Banks – An insurance bank gives the service of risk management to its customers. They sell the actual owner's product on his/her behalf in the auction market, where the product is presented for sale. The common carrier charges a fee known as freight for performing the role of a middleman.Īuctioneer – Auctioneers are people who sell the product via auction. In return for performing the role of the agent, they receive money or commission.Ĭommon Carriers – A common carrier is a functional middleman that carries the physical goods from the place where the manufacturing activity is being done to the place where the buyer will purchase the product. In simple terms, the commission agent sells the goods to the buyer on behalf of the actual seller. For performing the function of an intermediary, the broker charges fees from both the parties separately.Ĭommission Agents – A commission agent is a person who acts as a seller for the actual seller or owner of the goods. He/she brings the seller and buyer of the goods together. In this way, the functional middleman forms a link between the seller and buyer, which could be difficult if factors such as geographical location are considered.Ī broker is a person who is the link between seller and buyer. Similarly, there is a number of consumers who interact with the middleman for getting their products. A functional middleman only undertakes the activity related to transfer goods and getting paid from the owner of the goods.Īs shown in the diagram, many sellers are connected with a middleman for the distribution of their products. The merchant middleman acts as a middleman but has the ownership as s/he buys and sells to make a profit. The two main types of middlemen are functional and merchant middlemen. He/she performs the function of transferring goods from the seller to the buyer of the product. The middleman plays an important role as an intermediary between the seller of the goods and the goods' buyer. There are various players present in the distribution channels, among which the most important player is a middleman. These stages are referred to as distribution channels the product is transferred from the producer to the end consumer through all these channels. The produced goods are transferred through various stages before reaching the final consumer. An organization runs a business through which it produces goods and services for its customers.
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