The Lucrative Business Of The Middle Man
In some industries, the middleman may get an undeserving bad reputation for his role in business deals. A middleman is a person in between two parties that may or may not have any real knowledge of either profession but is able to connect the two to complete a mutual goal and of course for compensation. A few professions might call them resellers or even contractors in some cases, let me explain… A reseller is usually someone that’s using their contacts or cold calls to resale other businesses product or service. They probably have a script or sales letter to read from for promoting whatever the company is offering.
Resellers are not so much on a commission percentage base but more likely to get a set commission per sale. Contractors can play a few different roles depending on the circumstances. Let’s talk about the type of contractor that’s in the business of contracting. In my opinion, this is one of the smartest businesses there is because like we discussed in chapter one, you take any possible competition and turn them
into customers but let’s go a little deeper. A contractor will go and find clients that may need special niche or trade projects like carpentry, painting, roofing, and so on. The contractor may not know how to do any of the things but will find business or sub-contractors that specializes in each of those things and hire them to do the job. One reason this works so well is that 1. every project doesn’t require a licensed professional which means the contractor can hire a freelancer to do certain things for a lot less than a company would.
2. Hiring other businesses to work your projects saves the other company time and money on searching for new business which will keep them somewhat reliable and on-call. It’s like having an employee that you don’t have to pay by the hour when business is slow. Now here is what’s frowned upon, the contractor that’s offering the service is not disclosing that they are not actually doing the work which makes advertisements and sales material seem misleading or sketchy. This is a form of outsourcing. Behind the scenes, contracting companies will usually have some capital to back them because to really be in the game, you need to be able to bid on contracts, and to get big contracts your whole team needs to be insured. Bidding on contracts costs money period, but the reward is huge and well deserved.
Affiliate programs can be also a form of middle manning. Affiliate programs are programs that businesses create for the public to resale their products or services for a small commission fee. Affiliate programs are designed for the middleman to be anonymous. The product or service will have no real connection to the person or business that is promoting it. You can literally resale a candle from a candle company or resale a Cadillac from General Motors. It’s thousands of companies that offer these programs and they’re usually free, plus they work if you are in front of the right crowd.
The programs will usually consist of you signing up to some affiliate network, then choosing the businesses you want to advertise. Once you are signed up you will have access to product links and web banners with unique URLs that will probably have your member id number embedded into the link to track your sales to receive your commission.
These programs are for people that are online a lot of more advanced affiliates are using paid ads to push bigger ticket items. It’s tons of ways to use these programs to benefit. Some websites will use affiliate banners of recognized brands to attract bigger companies to get them to advertise on their website.
Online boutiques will use popular name brand products to sell on their website to make their product line seem more exclusive. Bloggers use affiliate ads to place next to related niche articles on their platforms, so say they are writing an article about cats and dogs it’s logical to place advertisements from businesses like Petsmart or Pets.com because the people reading the article are obviously interested in pets.
As you can see being the middleman can be a lucrative business if you can master some of these techniques. To recap on some of the benefits, You won’t have to hire a big staff or staff at all because you will be reselling other businesses products or services. For that same reason, there’s no overhead so it’s
no real need to have a physical location. You can choose what type of products or services you want to resale. This means you can instantly become a Realtor, auto broker, travel agent, jeweler, contractor, or virtually any profession that can be sold online.
There are pros and cons for everything and this is no exception. The middleman usually gets the least amount out of the deal especially when first starting out. After you learn how different industries operate then you’ll know what to look for and what companies need what services. If you don’t already have a giant list of contacts with clients ready to go then being the middleman can also be a very unstable niche. Most do it part-time and call it a hustle but connecting people who are looking for one another product or service can increase your bank account without breaking a sweat.
Oxford’s definition for outsourcing is… obtain (goods or a service) from an outside or foreign supplier, especially in place of an internal source. That’s the conservative definition but a practice that more businesses rely on than you may realize. Fast-food chains, automobile manufacturers, hospitals, and a ton of more industries may outsource for products, services, or even people.
Although outsourcing may seem similar to the same thing a middleman does there is a significant difference between the two. A middleman may have access to a product or person and find a potential customer for them but not really in that particular business. Outsourcing, on the other hand, you are already in that business or related industry where you would possibly provide that service anyway or bundle your current product with the outsourced product to sell together as a package.
It’s too many scenarios to discuss in one chapter on becoming the middleman but rest a sure the opportunities are real and it’s plenty of them. So next time you see somebody middle manning
a deal don’t be so quick to judge because they just might be on to something.