Intermediaries are agents who, as their name suggests, try to mediate or put in contact two or more parties trying to carry out a transaction or negotiation. The intermediary must connect these two agents with the ultimate aim that there is an exchange or, failing that, a communication between them.
The intermediary charges a fee or salary for the work he performs, it is the perfect solution for those times when it is difficult or expensive to relate between the parties. However, we are going to detail the costs that derive from the intermediation and that, thanks to an intermediary, we can lower it:
- Search costs. More than looking for information, it is about prioritizing and knowing how to organize it, especially in terms of Suppliers o creditors.
- Agent specialization. Agents prefer to specialize in other fields rather than dedicate efforts to making themselves known abroad. For example, it is cheaper for a tomato supplier to hire an intermediary than to do the job of selling the tomatoes themselves.
- Exact information. Intermediaries usually serve as consultants for many agents, to be able to know the correct information of what they are hiring or buying. They will inform us about the offer or what the other party requires.
- There are no good communication channels. Efficient communication channels do not exist or are difficult to find, the best way to find truthful and effective information is the one offered by intermediaries.
On the other hand, it is important that we highlight that we find 3 types of intermediaries in the economy and that we are going to comment below:
- El financial intermediary: connects savers with investors. These types of intermediaries are also often called brókers. They are able to create connections between those who save and those who have different projects or investments that need financing. These types of intermediaries will help agents to diversify their portfolio, as well as generate profits from both.
- The commercial intermediary: perhaps it is the best known by all, since it brings together bidders and demanders. They usually use it wholesalers y retailers, and puts the producers of goods and services in contact with their final consumers. A clear example of this type of intermediary are supermarkets.
- The legal intermediary: they help the parties to reach an agreement on a certain situation. They usually charge a fixed part and a variable part, depending on their function. We can include as an example a law firm.