Role of the middleman in marketing

There are approximately 300,000 manufacturing plants in the United States, of which less than 96,000 employ 20 or more workers. Of the 96,000, nearly 40 per cent (38,- 000) can be classified primarily as manufacturers of consumer goods. These plants employ over 4,500,000 people, some 29.6 per cent of all industrial workers. The other 58,000 manufacturing plants are engaged primarily in manufacturing industrial goods.
Of necessity, manufacturing is highly concentrated, since production cannot take place everywhere. But consumption, especially of consumer goods, takes place everywhere. The 200,000,000 people in the United States and the 20,000,000 people living in Canada live and consume everywhere. And while again we find concentrations-the United States has some 17,000 municipalities with close to 70 per cent of the total population —we also find another 17,000 townships with millions of people living in them. All these people are consumers. The finest food or apparel factory in the world is of little value unless its products get from the factories into consumers' hands. The men and women who perform the multitude of services of all kinds connected with the movement of goods from producer to consumer are the distributing middlemen. Regardless of who owns the institution-a manufacturer who operates his own sales branch, the wholesaler, the retailer, the carrier who transports the goods, or even the consumer who "buys direct"-whoever performs any service in connection with the movement of goods from factory to consumer is a middleman.
In marketing, as we have seen, we recognize two basic types of middlemen: (1) the functional middlemen (brokers, agents, commission men), and (2) the marketing middlemen (wholesalers, who are also referred to as jobbers or distributors, and retailers, who are often referred to as dealers).
The services performed by functional middlemen are limited, although very important in some lines of business. They are classified, in the Census of Distribution, as wholesale operators, and will therefore be included in the totals under wholesalers.
The student should remember, however, that functional middlemen are engaged primarily in bringing buyer and seller together and, for the most part, do not take active part in the physical movement of goods from producer to consumer. To most consumers, these functional middlemen are employees or agents of the manufacturer, much as a commission salesman might be employed by a manufacturer. To most people, there fore, these functional middlemen are not strictly middlemen at all. When people speak of middlemen, they generally have reference to the wholesale or the retail merchant.
Of the total value of goods of all kinds sold at wholesale in the United States, merchant wholesalers handle approximately 43 per cent. Manufacturer-owned sales offices and sales branches handle another 31 per cent In our consideration of wholesaling, we shall be primarily concerned with these two types of wholesale distributors: (1) the merchant wholesaler, and (2) the manufacturer-owned sales office or branch. The distinction between a sales office and sales branch is that the sales office does not carry merchandise whereas the branch does.