The Internet Hasn't Killed Middlemen (And It Never Will)

What's a middleman? Someone who takes your profits. Someone who stands between you and your customers. Someone who marks up the product. Yes, a middleman can be all of these things, but, more importantly, a middleman can be useful.

When the internet arrived, there was a lot of talk of no more middlemen. Well, years later, they're still here. It's true, businesses like traditional travel agents and book stores may have taken a blow, but they haven't been replaced by direct sellers. They've been replaced by other middlemen.

Amazon is a middleman.

Kayak is a middleman.

Zappos is a middleman.

Itunes is a middleman.

This new breed of middlemen combines an understanding of culture, technology, and product to bring value to both ends of the supply chain. In fact, that's what middlemen have always done, but as culture and technology change, so must the middleman.

We can bid a fond farewell to the middlemen of old, the middlemen of the old economy and not of the digital, and we can welcome new middlemen with open arms: record labels that focus on live events, e-commerce stores that thrive within e-culture, and many more middlemen who are sprouting up to take the place of their predecessors.

Sure, there are times when middlemen just get in the way, but for the most part they're a valuable part of our economy. The internet has changed a lot of things, but middlemen are here to stay.

Written by Chris Allison on November 19, 2009


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C.R says:

The middleman is everywhere like a plague. It will distort any communication between the maker of a product and end customer which knows what he wants. If you need a middle man then you deserve a higher price for some bushtit product. In fact the middle man is promoted by corporation’s bureaucracy and not the share holders. The bad thing is that all they do is to delay and distort the communication to a unrealistic high cost for paid by the end customer.

Chris says:

Gautam, I definitely agree. When a middleman's value becomes outdated, they either evolve or die. The internet has changed most industries significantly and established new channels for value creation. Companies that don't acknowledge that fact tend to be replaced by an online counterpart.

Gautam Sinha says:

Not killed but drastically reduced layers of middlemen from the old economy value chain.

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Chris Allison