“ A business concern that is specialized in rendering services immediately involved in the purchase or sale of the goods in the process of distribution is known as middle man.”
There term middle man included all those who operates between producer and consumers. They function in buying and selling if the commodity. The wholesalers and retailers are middleman dealing in the ordinary function of buying and selling. There are other such as brokers. Commission agents, dealers and merchants who assist the buyers ans sellers in the market.
KINDS OF MIDDLEMEN
Some of the middle men are explained as follow
A broker is an agent involved to buying and selling on behalf of principal for a commission. He does not hold any stock nor deals with his own name. his function is only to negotiate and make contract of sales and purchases on behalf of others. He is paid for his labour called as brokerage. There are different classes of brokers. They are produce broker, stock broker, insurance broker and ship broker.
He is an agent whose function is to receive goods from his principal for sale in commission. He can sell goods in his own name, pledge goods in his own possession receive payments and gives receipts. He is liable on contract of sale he enters into on behalf of his principal. A factor is also called a consignment broker.
3. COMMISSION AGENT
He acts on behalf of foreign importer. His function is to buy goods on behalf of client abroad and to dispatch them in accordance with the instructions. He receives a commission for his service.
They enter into agreement with promoters of newly started company which have not been taken up by the public. For this guarantee they are paid commission known as underwritten commission.
5.DEL CREDERE AGENT
He is an agent who in consideration for extra remuneration called del credere commission. Guarantees to his principal that the third person with whom he enters into contracts shall perform their obligation. Thus such an agent guarantees to his principal that he will only sell to person who will pay for what they buy and if the buyer does not pay, he will pay.
6. TRAVELLING AGENT
Sometimes wholesalers appoints number of agents who goes from place to place , show catalogues, price lists etc. to retailers , book orders and forward them to their principals who executes them. They receive their commission in return of their service.
7. SELLING AGENT
Sometimes wholesalers and manufactures appoints certain shop-keepers in different parts of the country as their selling agents. These agents receive commission on all sales in addition to the expenses which they have incurred on behalf of principal.
An auctioneer is an agent who sells goods by auction ie to the highest bidder in public competition. He has no authority to hold the goods sold and can deliver the goods only on receipt of price. He is the agent of the vender.
9. FORWARDING AGENT
This is the type of agent who is engaged in forwarding the goods to there destination on certain charges.
10. CLEARING AGENT
This agent is involved in clearing the imports on behalf of their principal. The duties include taking the delivery of the goods from the ship and attending to custom formalities for certain commission.
DISTINCTION BETWEEN FACTOR AND BROKER
1. He has the possession of goods or documents which entitle him to the possession.
2. He carries out the trade with his name.
3. He is himself liable in respect of the contract of sale.
4. He receives payment from the customer and gives him discharge.
5. He has lion in respect on goods in respect of his commission. Broker
1. He has no possession of the goods which he sells.
2. He brings together both the parties to a transaction. The sale is made in the name of the principal.
3. He is not liable in respect of such contracts.
4. He does not receive payment of the value of the goods from the customer and cannot give his discharge.
5. He has lien on goods.