The word "mediator" appeared in the circulation of ordinary citizens relatively recently - back in relatively recent Soviet times, people with this kind of activity were practically absent. It is understandable - the economy was planned, and no one cared about sales efficiency. Today, however, we live in capitalism, and commercial intermediaries for some reason play the role of almost the locomotive of the economy.
Who are they and their diversity
There are several interpretations of the term "intermediary". The first concerns processes related to the circulation of goods and the provision of services. In most cases, between the producers of value-added products or services and the final consumer there is a layer of certain actors. They are the intermediaries. The second interpretation of the term is a person who helps to establish links between various business entities (not necessarily the manufacturer and the consumer), counterparties. One way or another, intermediaries of all types are united by one property - for some reason they know that in one place there is a manufacturer of the goods, and in another there is (or should be) a buyer who is eager to purchase this product.
So, a person acts as a "conductor" of goods between the factory and the consumer. Intermediaries are people who can perform not only trading functions, but also some others, for example, provide the client with an additional service, the level of which for one reason or another is not available to the manufacturer. Elementary - to meet the buyer and politely communicate with him, explaining the benefits of the product. Intermediaries in the market and in business are not speculators in any way: they only fill a niche (trading and service) between the producer and the buyer of the goods. It is beneficial to work with them for the obvious reason - a person works for a percentage and is interested in selling as much as possible.
Representatives of this specialty in trade
There is a separate category - resellers, despite the fact that almost the entire range of services of people of this profile is somehow concentrated around sales. The key criterion that determines the direction of their work is the availability of a product or service with a fixed (added) value. In this, such intermediaries differ from, say, financial brokers working with “virtual” currency or raw prices formed by the exchange. The main task that resellers perform is communication between the producer of the goods and the buyer.
These people earn in two ways - by buying goods in bulk, which is cheaper, and then selling at retail, which is much more expensive, or by receiving commissions for the sale of the product. What can be examples of specific types of professions related to trade mediation? Firstly, these are brokers (selling goods and services for a commission, the size of which, as a rule, is agreed in advance). This category of intermediaries includes realtors whose commission is fixed regardless of whether he sells apartments - new buildings or "secondary". Real estate intermediaries are representatives of one of the most common professions in market economies. Secondly, distributors belong to resellers (selling goods from a firm to dealers, they earn on the price difference). Thirdly, they are salespeople (universal sellers who advertise and sell goods, earn money through a variety of schemes, as a rule, they travel from place to place all the time). Fourth, these are dealers (as a rule, they resell goods purchased at a preferential price directly from the distributor or from the manufacturer).
Finance Intermediaries
Once upon a time, conducting operations with money other than buying other goods for them was not particularly necessary - the currency had a fixed (often tied to the value of gold) price. Now cash flows are a whole field for speculation. This is used by financial intermediaries. Most actively, their work is in the field of investment. The most popular function of financial intermediaries here is to assess the risks of investment in the project. The investor thereby entrusts the disposal of his future capital not to the object of financing directly, but to a certain person who is able to analyze how profitable the project will be, what are its prospects, especially financial. Intermediaries take on the role of the entity making the decision about where the money will be invested.
The easiest way to understand this pattern is with specific institutions. Firstly, these are trustees: after receiving the money of clients, they decide how to profitably invest them in stocks, assets or, perhaps, lend someone. Secondly, these are credit unions - having at their disposal the funds of the people who entered them, they try to manage them in a profitable way. Thirdly, banks can also be referred to financial intermediaries (when it comes to deposits). Fourth, these are insurance companies that, having received money from customers, use them as part of various funded programs. Fifthly, these are pension funds, which turn the funds of citizens who have drawn up the contract into profitable payments when a person completes his labor activity. Who are financial intermediaries? These are organizations specializing in working with cash flows, which can take different forms, but the content in all cases remains approximately the same.
Marketing intermediaries
The market is a multilevel phenomenon. The manufacturer, in order to sell his product, must, firstly, familiarize buyers with the fact of its release, and secondly, deliver the goods to the final consumer. If you can’t do it on your own, marketing intermediaries will come to the rescue. There are several varieties of subjects of similar activities. For example, these are companies for the logistic support of goods, firms specializing in the storage of products in warehouses, ensuring the safety of manufactured products. Most often, they are contacted by manufacturers who do not have internal infrastructure resources for the indicated types of activity or who lack financial resources for these purposes.
Another category of marketing intermediaries is lenders (or investors) who are able to supply the business with working capital to build the necessary infrastructure or expand the staff to promote the product. In addition to lenders, a businessman can turn to insurance companies that offer protection against entrepreneurial or commercial risks. Another category of marketing intermediaries is firms and entrepreneurs who help the manufacturer study the market, correctly advertise the product, analyze demand and, if necessary, adjust the process of production.
Service Intermediaries
Services, as you know, have a number of features that fundamentally distinguish them from goods - this is intangibility, nonconservation, inseparability from the source of the provision, as well as high volatility (variability) of quality. Due to these characteristics, the role of intermediaries in the service sector is usually limited. Since the services are intangible, the client, without personally testing them, will not be able to get an idea about their real properties, about the level of service in a particular company. Intermediaries can, at best, colorfully describe the source of the service, but trust in such actions will not always be high. The client would rather find the recommendation of his acquaintance, rather than a little-known person, even if he speaks very beautifully, more plausible. At the same time, a mediation market for services exists, and there are firms specializing in such activities. Their common name is “service franchisor,” or “service intermediary.”
They conclude an agreement with the source of the provision of services and receive from him a “franchise” - exclusive rights to provide the service under a protected trademark, label, technology. The brand owner determines the basic principles by which his services should be provided. If he decides that somewhere else there is a company or entrepreneur capable of providing a service that meets the requirements, he can conclude a franchise agreement with him and will be sure that the client will receive approximately the same as if he came to the “head office” structure.
Retail industry
There is a subspecies of resellers referred to as “retailers.” They buy goods from the manufacturer or distributor, and then sell them to the final consumer with profit. Retailers operate on the end sections of distribution channels. They have several basic functions. Firstly, this is a selection of product range. The specialists of the company engaged in retail brokerage analyze supply chains, select the best manufacturers in terms of their business model, and compile product catalogs. Secondly, this is an advertising and informational work - ordering and placing commercial displays in the media, TV, the Internet, placing information about products on display cases, printing corporate booklets and creating other sources of product data. Thirdly, this is the placement and storage of goods in warehouses, laying them out on the counter, tracking freshness and appearance. Fourth, this is the technological support of transactions with customers - acquiring, settlement and cash services, cash acceptance, exchange and return of products. This may also include lending, a discount policy. Fifthly, this is the provision of various client services - delivery, work on claims, conducting socially significant events.
Logistic Intermediaries
The most important component of the product manufacturer's work on the market is logistics. Within this area, intermediaries also exist. They are divided into three main groups - 3PL providers, 4PL providers and narrow profile companies. Logistic intermediaries appeared due to the desire of manufacturers to concentrate and channel free working capital into the main formats of activity. Accordingly, to solve the problems of delivery of goods and warehouse accounting factories turn to third-party businesses (in the format of "outsourcing"). Narrow-profile firms related to logistics intermediaries are forwarders, freight and warehouse terminal operators, and transport companies. Each of them is ready to take on part of the "outsourcing" functions of the manufacturer. 3PL (third party logictics) - companies that are able to provide a comprehensive logistics service. They perform many functions, but all of them are intermediaries. These are entities that are closely integrated into the business model of the producer of goods. The contracts concluded between the factory and such organizations are, as a rule, long-term, relations are trusting. Sometimes 3PL providers take on liability obligations (which is rare for the “outsourcing” services market). There are also 4PL providers - they are companies offering the most complete range of services, a kind of "reference" providers of intermediary services in the field of logistics.
The provision of services via the Internet
With the advent of online trading, a new kind of intermediary has emerged. He does not have a clear definition, let's call them "Internet intermediaries." These are people who provide the movement of goods from the seller or manufacturer to the buyer, using the channels of the Internet. As a rule, these are legal entities or individuals who help to choose the right product (as an option - translate the description into the buyer's native language), exercise control over the delivery, provide exchange or return procedures. Resellers are connected to online trading in the following main cases. Firstly, if the online store cannot send parcels to the country where the buyer is located. Secondly, an intermediary can help deliver the goods faster than the seller will do under the standard scheme. Thirdly, the help of third parties may be necessary for the buyer if he makes purchases in different stores, and the amount for delivery is too high - you need a person who can “collect” different positions and send them at a better price to one address. Fourth, the buyer’s interaction with the country of origin is in some way difficult or blocked (for example, the store does not accept Russian bank cards or does not have a menu in Russian).
Features of working with intermediaries
The Russian economy is still developing, and the standards for providing many services have not yet been established. Therefore, the relationship between businessmen and intermediaries in our country is characterized by specific features. The youth of the market dictates its realities. The main feature of the market now is that Russian intermediaries sometimes think tactically - they negotiate a profitable contract with inflated interest. This is disadvantageous to anyone. The manufacturer, realizing that it has overpaid, will choose another partner, and the end consumer will be forced to buy the product expensively due to the high appetite of the intermediary.
In developed countries, the approach, as a rule, is different, more “strategic", and this is very welcomed by commercial organizations. Intermediaries there do not expect and do not strive for a one-time profit, but try to build long-term relations with producers of goods. Largely for this reason, prices in European and American stores are lower than ours (although the factory cost may be higher). Market experts believe that in Russia the development of the market of official dealers has the greatest prospects, when the price of goods offered to the final consumer is recommended by the manufacturer. The incentive for intermediaries is a discount on the receipt of products (which may increase if sales go well).
American mediation style and Russian realities
The United States, which has the largest economy in the world, is considered the reference provider of professional intermediaries. The style characteristic of American dealers - it is spectacular, "fairness." Presentations of intermediaries in front of clients acquire a pathos coloring, promises of a lot, "all at once". This approach is actively promoted in marketing textbooks at American universities, and more recently in Russian. Until now, many marketers in our country believe that the American mediators are the bearers of the best negotiating practices; these are the best professionals in the world, according to gullible Russian experts. In many ways, the principles of transatlantic origin are considered the only correct ones.
But to what extent is the style of the American mediator compatible with Russian realities? Experts suggest that in a very small. The Russians have developed a certain immunity to presentations, vivid, confident speeches of speakers, to intermediaries who sell goods aggressively and assertively. Therefore, using American tactics, an intermediary working in Russia may not be faced with excessive demand for the goods sold, but with rejection. It should be noted that in the United States the client is changing. Sociability, receptivity, credulity, openness of American buyers is a thing of the past.