What Are Business Intermediaries? (Including 11 Examples)

By Indeed Editorial Team

March 15, 2021

Business intermediaries help companies sell their products and services to consumers, and they are present in nearly every industry. If you are interested in work as a business intermediary or are curious about how they affect the consumer market, it may be helpful to know some common examples. In this article, we define the role of a business intermediary, explain when you need one and provide examples of business intermediaries.

What are intermediaries in business?

A business intermediary acts as a liaison between manufacturers and consumers. Business intermediaries are external professionals or companies who deliver or otherwise sell another company's products to customers. An intermediary's level of involvement with customers and ownership of the product they sell depends on the type of intermediary they are.

Read more: 4 Types of Channel Intermediaries

When do you need a business intermediary?

Manufacturing companies rely on business intermediaries to help their products reach consumers. When a company does not have the means or desire to have direct contact with customers, they use business intermediaries instead.

Because some business intermediaries buy or have partial ownership of the product they sell, companies that use business intermediaries sometimes can make a profit before the product reaches its final buyer. This can be beneficial to smaller manufacturers and for companies that are unfamiliar with the consumer side of business.

Examples of business intermediaries

Business intermediaries are very common in the consumer industry. Most leading brands and companies use intermediaries. Here's a list of common examples, including both professionals and types of companies:

Real estate agents/brokers

Real estate agents and brokers work with property owners to sell houses and land. These agents and brokers meet with interested buyers to help them make this purchase.

Real estate agents and brokers do not have any ownership of the property they sell, but they earn a commission fee. A predetermined percentage of the property sale determines the commission fee.

Entertainment agents

Entertainment agents or managers represent actors, actresses, artists and other entertainment professionals. Entertainment agents can work with multiple entertainment professionals at a time, and they help their clients find roles, opportunities and other ways to earn the artist recognition for their work.

Entertainment professionals hire agents to help them gain higher paying or bigger scale opportunities than they could otherwise access on their own. Agents often have their own professional contacts that can give their clients an advantage in their career.

Literary agents

Similar to entertainment agents, literary agents work with authors to help pitch their literary work to publishing companies. Because many of these publishing companies do not accept direct contact from authors, literary agents help increase an author's chances of getting published.

Authors seek out literary agents by sending a query letter that describes the manuscript that they hope to publish. If the literary agent wants to learn or read more, they initiate further contact that can lead to an official business parternship.

Related: How To Write a Query Letter: Tips and an Example

Investment bankers

Investment bankers manage investments and complete transactions of monetary securities. These high-level professionals are experts in the finance industry. They study the economy and stock market in order to track any patterns or practices that could help their clients make sound investments.

Individuals and companies hire investment bankers to offer advice on their financial decisions. Buying, selling and trading securities requires a special license that investment bankers have. Because of this, clients must use investment bankers as an intermediary in their large financial and investment transactions.

Read more: What Do Investment Banks Do? Definition and the Role of Investment Bankers

Car salespeople

A car salesperson works at an automotive dealership to make individual car sales. Car salespeople hold no ownership in the vehicles they sell and often rely on commissions from the sale.

Car salespeople and dealerships allow vehicle manufacturers to focus on creating automobiles instead of having to work with customers to sell the cars. Because a car is often an expensive purchase, customers may feel more comfortable working with a salesperson rather than making the decision without guidance.

Grocery stores

Grocery stores are a great example of retail intermediaries. Grocery stores buy produce and other products from farmers and suppliers to stock in their stores. This offers convenience to both food suppliers and customers.

These stores vary in size and product assortment. Some grocery stores specialize in a certain type of cuisine, while others may stock a more general array of products. Larger grocery stores also may serve as intermediaries for multiple production companies, offering different brands for customers to choose from.

Department stores

Department stores are retail intermediaries that sell a variety of products. Often organized in sections based on the products that are in stock, department stores can offer food, clothing, media, home supplies and other goods all in one store.

These stores act as intermediaries for multiple companies from a wide span of industries. This is convenient for consumers, as they have the option to only visit one store for their needs.

Shopping malls

Shopping malls consist of several businesses all operating on the same property. Shopping malls benefit consumers by hosting a variety of stores and restaurants within walking distance of each other. These shopping establishments act as intermediaries in a variety of ways.

First, shopping malls work with retailers and restaurants to allow them a convenient and high-traffic area to sell goods and services. Though mall companies are not responsible for selling products, they can profit from the rent that retailers and restaurants pay to use the property.

The retailers in shopping malls often sell products they purchased from a manufacturer. The restaurants that are located inside shopping malls use wholesale intermediaries and farmers for their food supply.

Thrift stores

Thrift stores are a unique form of a business intermediary because consumers primarily supply their products. Sometimes, thrift stores pay customers a small consignment fee for their second-hand apparel and home goods. Other thrift stores are exclusively donation-based.

Thrift stores help consumers find uses for their extra clothes and home goods while also offering an alternative to fast-fashion stores. The store itself acts as the intermediary between the individuals supplying the products and the customers purchasing them.

Online selling platforms

Online selling platforms connect individual product sellers to consumers. These platforms are especially popular among artists and crafters, as the platform can provide marketing and shipping help. Often, an online selling platform will have a theme of products, such as handmade items, to attract consumers to the site. Then, consumers can browse the different products that individual sellers have to offer.

The online selling platforms profit by charging creators to list an item and by taking a set percentage of each sale as commission.

Food wholesalers

Food wholesalers often are part of a chain store that sells items in bulk. These stores are especially popular with produce and other food items and often cater to those hosting large parties or locally owned restaurants.

Food wholesalers act as an intermediary between manufacturers and consumers. They often can buy products in bulk from the manufacturer at a discounted price, then the wholesaler may choose to offer bulk items at a discount to consumers as well.

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