Millions of dollars are being made each day by middlemen ranging from billion-dollar companies to entrepreneurs, and even sole proprietors. Amazon makes 1.29 billion dollars per day as a middleman.
Join Jay on today’s Black Entrepreneur Blueprint podcast episode # 460 as he discusses the pros and cons of middlemen as it pertains to your entrepreneur success, and how you can leverage the middleman position for profit.
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BLACK ENTREPRENEUR BLUEPRINT SHOW NOTES – EPISODE # 460
The term “middleman” has gotten a bad rap for many years because many people feel that middlemen increase the cost of the end product or service, but there is also profit to be made if you can connect two parties.
Definition of a middleman – an intermediary or agent between two parties. especially a dealer, agent, or company intermediate between the producer of goods and the retailer or consumer.
Let’s look at some of the most popular middlemen: Amazon: connects buyers and sellers to the tune of over $1.29 billion each day in revenue. Airbnb: connects travelers with lodging. Uber: connects riders to transportation. Kayak: connects travelers with airfare and hotel accommodations. Lending Tree: connects loan shoppers to lenders. On a smaller scale, independent insurance agents: connect consumers (end-users) to insurance companies. Peerspace: connects consumers to event spaces. Real estate agent: connects homebuyers to property sellers. Travel agents: help travelers plan to travel. Affiliate marketers: act as a middleman to market someone else’s product or service. Lead generation company: connects prospects to specific companies by generating leads.
- You don’t have to create the product or service you’re selling
- Usually a lower barrier to entry versus selling your own products or services
- Tremendous revenue potential based on the product or service you’re marketing (mortgage broker, RE agent)
- Ability to market multiple products or services, or change the product or service you’re marketing
- Learn the most important aspect of business which is learning to generate leads
- If you’re smart, you’ll own the customer (like Amazon does) – you do this by building your database
- You don’t own or control the end product, so you don’t control anything
- You’re at the mercy of the product owner or service provider to get paid
- Products and services can be changed or discontinued ( sold a DIY credit repair software and it was shelved)
- You may have no input or limited input on the fulfillment of the product or service (selling home improvements)
SECRET TO MAKING MONEY AS A MIDDLEMAN
The secret to making money as a middleman that will ensure you never go broke is to build a lead generation system. If you can systematically create leads you can sell anything.
The reason many companies need middlemen or affiliates is that they either can’t generate enough leads to make it cost-effective, or they just don’t know how. If you control the leads, you control everything.
IF YOU’RE REALLY SMART, YOU’LL CREATE A DUAL-SIDED MARKETPLACE
Definition – is a platform that brings together two groups – usually buyers and sellers and makes money by connecting them. The platform usually makes on a per transaction basis (like a percentage of sales), by a subscription fee by sellers, or by both. Example: BeSmartBuyBlack.com which will be back shortly.