People are always looking to cut the “middle man”.
Answer: If your customers think of you that way. If you’re viewed as a “distributor” or an “integrator”, not a “manufacturer” or “product creator”.
The “middle man” is perceived to add no value. He takes merchandise in the back door, marks is up, and ships it out the front door.
Customers refer to the cost of a perceived middle man the following way: “Why should I have to pay his tax?”.
Consumers so want to “cut out the middle man” that Amazon revenues are now larger than the GDP of half the world’s countries. Jeff Bezos just bought the Washington Post. Not “Amazon bought the Washington Post”. Jeff Bezos did. (This also says something about the price of newspaper companies that are losing $50M per year, as The Post currently is).
There is huge room for the middle man, however.
In technology, old concepts continuously get new names which make them seem like new ideas. The “Cloud” used to be an “ASP” and before that, a “Service Bureau”.
The middle man was commonly referred to as a “VAR”, or Value-Added Reseller.
There are many opportunities to “add value” now, but it must be done so in practical, obvious ways.
- Analytics and data-related services are an example.
- Also compliance and risk management.
- So too is thought leadership and human factors.
There are many opportunities for “the middle man”, but when customers perceive him as a tax rather than a source of value (and their grading scales are very, very high) then he is viewed as a hanger-on, a redundant cost, and he will be a fish swimming in a restaurant tank.
Jeff Bezos has said that “your margin is my opportunity”. The market ruthlessly demands continuous improvement. Middle men have to improve faster than everyone else.