Elimination of Middlemen between Producers and Consumers

Elimination of Middlemen
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Is the long predicted elimination of middlemen (as opposed to the substitution of one type of middleman for another) on the horizon?
The long predicted elimination of middlemen is actually on the horizon. The key marketing objective is essentially to create important exchanges between producers and consumers. Middlemen, also known as intermediaries, play a crucial role of making sure that the channel of distribution between the consumer and producer is complete. The main function of middlemen is to distribute products to the consumers wherever and whenever they want them. In order to accomplish this, middlemen purchase the goods from the producers, hoard them as they look for viable markets, and then distribute them to the consumers (Geer, 2012). Moreover, they promote the products to the consumers on the producers’ behalf. They also make sure there is a smooth flow of products within the marketplace by matching demand and supply. The more the number of middlemen, the higher the distribution channel.
Despite their integral functions in the distribution channel, there are some drawbacks of having them in the distribution channel. As the products get exchanged from one middleman to another one, their prices increase. The reasoning behind higher prices is to cover expenses on the products including costs of transportation, insurance and warehousing. They also incorporate some profit mark-up in the sales. As such, the customers swallow the price of having middlemen in the distribution channel. If the middlemen are eliminated, then the producer/the company will assume the functions of the middlemen. The firm will interact directly with its target audience, collect information about their customers regarding their dislikes and preferences, and recognize alters in trends (Geer, 2012). Buyers will buy directly from producers.
Although most people purchase services and goods/products in physical shops and physical retails stores, a growing number of consumers are choosing to make their purchases online by doing online shopping. Online shopping might become the number one choice for shoppers in the United States; it is particular used to a great extent during holiday season. Online shopping could overtake traditional brick-and-mortar shopping as consumers look for lower prices available over the internet, as well as the convenience of shopping anywhere and anytime. This serves to reduce the need for wholesalers and physical stores (Liu, Burns & Hou, 2013).
The collection of information on existing, prospective and potential customers by manufacturers would change to some extent if middlemen are eliminated from the channel. Reducing the middleman’s role would force the manufacturers to get to know their existing, prospective and potential customers. As the intermediaries for the manufacturers, middlemen studied the marketplace and familiarized themselves with the target audience. Thus removing this buffer would compel th...