Marketing is an important business function. Marketing is responsible for product development, distribution, pricing, and promotion. Distribution ensures the product or service is delivered to the consumer. In distribution, middlemen are responsible for bringing the product closer to the customers.
Brokers purchase products from sellers at a low price. They later sell the product to the consumer at a higher price. The middlemen assume all the risks associated with the product as it moves along the distribution channel. The risks borne by the brokers are used to justify the higher prices to the consumers. In some situations, the middlemen do not handle the product; rather, they directly connect the buyer to the seller.
Wholesalers and retailers are examples of middlemen. They purchase the product in bulk and at a low price. They later sell the product at a higher price and in quantities required by the consumer.