Middlemen Jonathan Poland

A middleman is a person or organization that acts as an intermediary between a producer and a consumer. In a business context, a middleman typically adds value to a product or service by facilitating the exchange between the producer and the consumer. For example, a wholesaler might purchase goods from a manufacturer and then sell them to retailers, adding value by providing a more convenient way for the retailer to access the goods. In this way, the middleman is able to capture some of the value created by the exchange between the producer and the consumer. Overall, the middleman business model can be a useful way for businesses to add value and generate revenue by facilitating transactions between producers and consumers. The following are common examples.

Buying from producers and selling to other sellers as opposed to consumers. For example, a wholesaler of fish and vegetables who buys from farms and fisherman and sells to grocery stores and restaurants. This adds value as it is a great deal of overhead to deal with individual farms such that it makes sense to share this cost amongst many sellers.

A cooperative is an organization created by producers to pool their resources and increase their negotiating power. For example, a farming cooperative that sells the agricultural products of many farms to wholesalers.

Selling products and services through digital channels. The internet is a middleman business model when the seller is not the producer.

Reseller is a broad term for selling something you didn’t produce.

Parallel Import
Importing things without the permission of the producer. For example, a firm that imports a variety of European jams to Japan without reaching any distribution agreements with the manufacturers of these products.

Arbitrage is the process of capturing value by taking advantage of price differences in different markets. For example, a soap manufacturer who sells soap for $8 in US and $38 dollars in Hong Kong might attract parallel importers who take advantage of this price difference.

Trading House
A firm that helps producers reach foreign markets. For example, a Japanese firm that handles localization of products, sales, compliance and taxes for foreign firms who want to sell into Japanese markets.

Retail is a middleman business model if the retailer doesn’t produce what they sell. For example, a sports shop that sells snowboards from various brands.

A broker executes a transaction on behalf of another. For example, a real estate company that sells hundreds of units on behalf of a house builder.

An agent represents the interests of another. This is very similar to broker except that an agent is usually an individual and a broker is usually a firm.

A market connects buyers and sellers and takes a cut of each transaction. For example, a market for vacation rentals that connects owners with short term renters.

A market that sells to the highest bidder.

Cutting Out the Middleman
Business models that seek to reduce the number of intermediaries between the producer and consumer. For example, a farmers market where farmers can sell directly to consumers. It should be noted that it is common for middleman to participate in farmers markets.

Learn More
Project Communication Jonathan Poland

Project Communication

Project communication is the exchange of information and messages that occurs during the planning, execution, and evaluation phases of a…

Autonomous Technology Jonathan Poland

Autonomous Technology

Autonomous technology refers to technology that is capable of functioning independently and adapting to changing real-world conditions without human intervention.…

Collectables Jonathan Poland


Collectables, also known as collectibles or antiques, are items that are valued for their rarity, historical significance, or aesthetic appeal.…

Quantum Computing Jonathan Poland

Quantum Computing

Quantum computing is a fascinating and rapidly evolving field that seeks to harness the principles of quantum mechanics to perform…

Technology 101 Jonathan Poland

Technology 101

Technology is an important component of every business, constantly reshaping entire industries. Keeping pace with new and emerging technology can…

Practical Thinking Jonathan Poland

Practical Thinking

Practical thinking is a type of thinking that focuses on finding timely and reasonable solutions to problems. This type of…

What is a Product Line? Jonathan Poland

What is a Product Line?

A product line refers to a group of related products that are marketed together as a single unit. Product lines…

Team Strategy Jonathan Poland

Team Strategy

A team strategy is a plan that outlines how a team will achieve its goals. Developing and implementing a strategy…

Retail Automation Jonathan Poland

Retail Automation

Retail automation refers to the use of technology to automate and streamline various processes in the retail industry, such as…

Latest Thinking

Qualified Small Business Stock (QSBS) Jonathan Poland

Qualified Small Business Stock (QSBS)

Qualified Small Business Stock (QSBS) refers to a special classification of stock in the United States that offers significant tax…

Barrick Gold Jonathan Poland

Barrick Gold

Barrick Gold Corporation (NYSE: GOLD) is a significant player in the global economy, particularly within the gold mining industry. Its…

Newmont Corporation Jonathan Poland

Newmont Corporation

Newmont Corporation (NYSE: NEM), being the world’s largest gold mining corporation, with extensive operations in mining and production of not…

Gold is Money Jonathan Poland

Gold is Money

Overview The history of gold as money spans thousands of years and has played a pivotal role in the economic…

What is Leadership? Jonathan Poland

What is Leadership?

In the modern business world, where rapid changes, technological advancements, and global challenges are the norm, effective leadership is more…

Product Durability Jonathan Poland

Product Durability

A durable product, often referred to as a durable good, is a product that does not quickly wear out or,…

Durable Competitive Advantage Jonathan Poland

Durable Competitive Advantage

The most important aspect of durability is market fit. Unique super simple products or services that does change much if…

Praxeology Jonathan Poland


Praxeology is the study of human action, particularly as it pertains to decision-making and the pursuit of goals. The term…

Business Models Jonathan Poland

Business Models

Business models define how a company creates, delivers, and captures value. There are numerous business models, each tailored to specific…