Is this the end of middle-men and middle-women?

Hi Dien!

While the internet may seem to put an end to being a middleman, it only seems that way.

In reality, it makes it much easier for anyone to get into the business. And that is perhaps the biggest problem.

In the old days (pre net) to be a middle man (importer/exporter or import/export agent or local wholesaler, or JV deal-maker - yes sourcing products from a supplier to offer to a retailer's customer list still sees you as a middle man) you had to be more phyically involved - more hands on.

Either you had to scour over interstate Yellow Pages' looking for suppliers whose goods you could represent at the local level, or you had to scour international Yellow Pages' for the suppliers, or go visit the international suppliers face-to-face.

This kept a lot of people out of the game.

The net has solved all those problems.

Now ANYONE can find an overseas or interstate supplier/manufacturer. They either search the online Yellow Pages' for each country, go to a search engine and search, or visit the international trade websites, such as Thomas Register (US and European versions).

They can then get samples sent to them, for free, or by paying either product or postage costs. And can then hire commission-only salemen to sell the product to the retailers, or do it themselves. Or find out what the retailers want and then find the supplier to match.

The retailers, generally speaking, do not have the time to source the products themselves. They're too busy with their shop and all the government paperwork they now have to do.

And if they do have the time, it'd be in your best interest to get the overseas or local supplier/manufacturer to make a commitment to you. That is, get them to agree that YOU are the sole supplier (wholesaler/rep/whatever) in your area/state/country. Then it doesn't matter who else finds them from your own area/state/country. They are forced to go through you.

I mentioned that the biggest problem is that everyone can now get in on the act.

Yep, it's sad, but the ease which allows you to start up a legitimate business is also the ease which allows illegitimate businesses and fly-by-night guys to start up - just look at all the instant internet marketing gurus to see what I'm talking about.

And that means the suppliers, wherever they are, could end up being swamped with offers from all over the place. Some real, mostly garbage offers put forward by people looking for instant wealth. Then the supplier will become very reluctant to consider any offers that cross their desk.

The saving grace in all this is the time it takes to get something done. It's not an instant thing. There's price negotiations to consider, shipping negotiations, volume negotiations, payment terms, customs, etc., etc., etc. And that's just for the "getting the product from the supplier" side. There's also the "getting the product into the retailers hands" side. And there can be a multitude of variable factors there as well. All in all, the process "could" take months. It could also happen very fast. No two negotiations are the same. And it can be a lot of hard work (hard work, of course, being a relative term) if you're serious about it.

Dennis Hessler of spyglass point http://www.spyglasspoint.com writes some good stuff about this - fly-by-nighters, or as he calls them, fax jokeys - and how it relates to import/export.

The fax jokeys NEVER last long. There's too much involved.

And yet, if you're willing to become as valuable a resource to your suppliers and retailers as possible, then the rewards can be very good.

In my post below - http://www.sowpub.com/cgi-bin/forum/webbbs_config.pl?read=1952 - which is a true story, you can see how relatively easy it can be. A few phone calls here a few phone calls there and BANG, you're a middle man.

But the dark side is represented by another story. I won't go into the details, but one of my overseas suppliers has taken about a month and a half to get some vital information to me. Why so long? Because he has been waiting that long for the information to filter through the supply chain - he gets it from the factory who gets it from their supplier who gets it from their supplier and so on. A long arduous process that'll see fax jokeys fall by the wayside, in this case. Not so in the case which I related in the post I linked above.

Seeing as it "could" take up to a month or more to get a deal in place, that very fact will see retailers shirk away from it. Remember, they're too busy running their business to do all that. Far easier to go to you, who's willing and has done it all, to get an instant solution.

And if you, as the middleman, decide to get something manufactured, then that's a whole different ball game all together. Then you've got to locate the manufactures, get prices, haggle over the prices, shipping terms, etc., etc., etc. Things a retailer doesn't have the time to bother with.

But again, if you're willing to do it, the risk is VERY SMALL and the rewards can be ASTRONOMICAL.

For instance, imagine getting a standing order for 4000 units per month and making only $1.50 per unit. Sounds like a small profit I know. But times 4000 it means $6,000 a month in your pocket. And as it's a standing order, the amount of work you do after the deal is in place is minimal.

After all is said and done, it's my opinion that,

dollar for dollar, there's nothing that beats being a middleman.

You make money just by having products pass through your business. And now with the help of the internet, getting into it is so much easier than before.

Of course, the big boy retailers, like k-mart, would like to by-pass you. BUT, with your valuable exclusive agreement in place, even they can't do it.

Michael Ross.


Practice being the middleman without risking your own money