I guess many people have heard this phrase: no middlemen taking a cut. What is it like to have middlemen take a cut? You scroll through Douyin, and a livestream host says, "Those可恶 middlemen! Our beef jerky is so cheap on the grassland, but once it passes through your hands, it becomes so expensive for customers. Why?" You go to dinner, and a relative who runs a factory says, "It's pointless. We work day and night, earning just a few cents per item, but those middlemen take it and resell it for two yuan in supermarkets. They're the ones making the money." You go to a meeting, and the company's purchasing manager says, "This year, for these categories, let's find a way to negotiate directly with the end factories. Those middlemen who take a cut—kick them out if we can." How despicable. If it weren't for these middlemen taking a cut on both ends, sellers could earn more, and buyers could buy cheaper. But is that really true? As a business consultant, I've attended many distributor and agent conferences held by brand owners. As the founder of a small company, I often deal with middlemen myself. Are middlemen who take a cut really despicable? Is their value only about sucking blood from both ends? Would it really be better for me without middlemen taking a cut? Of course not. On the contrary, what I fear most is having no middlemen taking a cut. What do I mean? Let me tell you a story first.

The Complexity Upstream Is Shielded

It was a Monday like any other. Purchasing officer Xiao Wang had just turned on his computer when he received a WeChat message from his boss: "Find a reliable trainer to give a training session to the sales team next month." After replying "OK," Xiao Wang realized he had at least two options:

One, go directly. Open Baidu, open Weibo, open Moments, ask if there are suitable trainers, and ask if the price is right.

Two, go through a middleman. Find a few intermediary agencies with training business, discuss your needs with them, and wait for their recommendations.

How to choose? Isn't it obvious? Today, with the internet so developed and information unprecedentedly symmetrical, how could you not find a trainer? Bypassing middlemen would be more cost-effective, right? So, without much hesitation, Xiao Wang chose option one and started searching. However, within three minutes, he discovered a problem: the training industry is very fragmented. There are many trainers, and a quick search yields a flood of results. Which ones are truly skilled, and which are just good at marketing? You don't know. You have to guess, ask around, and check reputations one by one until you find all the seemingly suitable candidates. Then, you have to ask about prices, check availability, and negotiate back and forth. What he thought would take a morning ended up taking a week just to shortlist candidates. But then, just as he was about to sign the contract, the situation changed. First, the trainer he most wanted suddenly had no availability. Then, the backup trainer had appeared on a variety show and tripled his quote. So he had to start over—searching, comparing, and confirming. After finalizing the contract, there was another round of confirmations. For example, just coordinating flights, hotels, and pickup times took several days of back-and-forth, with four or five rounds of confirmation. After all that, Xiao Wang was exhausted and didn't want to say a word.

But, but, he couldn't leave work yet. Looking at his computer, this training was just one item in a long list of purchases. There were many more things to buy. Even though the internet has made information unprecedentedly symmetrical, collecting information, filtering it, and turning it into reliable transactions... every step still involves uncertainty.

This is the complexity upstream. Thinking about this complexity, Xiao Wang felt terrible. Because it meant that for every item, if he chose option one, he would have to go through the whole process again. He would have to collect, verify, negotiate, confirm, service, and quality-check... What to do? Xiao Wang didn't dare think about it. He took a deep breath and threw himself into another round of overtime.

On the day of the training, the trainer arrived on time. However, the thing purchasers fear most happened: the purchased product was unreliable. The trainer's delivery was sloppy—every slide of the PPT was more careless than his promotional posters, and the content was even off-topic. The boss's expression changed, and colleagues began whispering. In the air-conditioned room set to 26 degrees, Xiao Wang's back was slowly soaked with cold sweat. But what could he do? Such mistakes often aren't allowed to happen twice. Three days after the training, despite his best efforts, Xiao Wang was "let go."

Soon, a new purchaser, Xiao Li, sat in Xiao Wang's old seat. On another Monday, Xiao Li also received a training procurement request. Having heard Xiao Wang's story, he chose option two without hesitation: Find relevant middlemen and send them the requirements. Which trainer is skilled? What are the quotes? Are they available? What are the flight and hotel requirements? Can they meet my needs? I don't care. You go find out, you make judgments, you confirm. I just take the quote sheet you provide after shielding me from that complexity and make a choice. Then, for the next item, and the next, I handle it the same way: Send the requirements to you, keep the certainty for myself. From now on, I don't need to worry about how fast the market changes, whether the supplier from last time still exists, whether prices have risen, or whether it's still the best choice. Nor do I need to worry about how fragmented or complex the industry is, or how many suppliers I need to quote and compare. I only need to deal with you. Over the years, you've accumulated more suppliers than I could find in a few all-nighters, and some you have that I can't even find. Your understanding of products and services in your field is based on frontline, timely feedback, far more reliable than my filtering through ads. Only by working with you can I better take responsibility for my procurement results while freeing up time and energy for my own expertise.

The training day arrived. Xiao Li, who had confirmed the trainer with the middleman long ago, received positive feedback from his boss and colleagues: "This trainer is very professional. Our procurement is also very professional." The next month, Xiao Li went further. Based on the company's procurement needs, he built a categorized database of middlemen, ensuring that for every purchase, he could find and collaborate with people more professional than himself. At year-end, Xiao Li, who didn't work much overtime but delivered certainty every time, received the Best Employee award.

This is why today, many large enterprises still cooperate with middlemen for procurement rather than signing directly with the most upstream manufacturers or brand owners. Because the core value of middlemen taking a cut isn't about exploiting information gaps or bargaining on both ends; it's about solidly shielding you from upstream complexity.

That sounds reasonable. But what if my upstream isn't that fragmented or complex? Do I still need middlemen to take a cut? Good question.

Small-Scale, Low-Cost

When the upstream is highly concentrated, with products concentrated in a few large factories or giants, what happens? You might encounter a group of people: humble clients. What? Aren't clients the ones paying? Why would those giving money be humble? Well, let me give an example. Once at dinner, an engineering contractor asked with a smile: "Have you ever bought steel? When I first started projects, the first time I felt humble was buying steel. For a construction site, any building requires hundreds of tons of steel, so at first, I didn't want middlemen to take a cut. I sent my steel requirements directly to the steel mill. What happened? They ignored me for days. Why? I checked carefully—type, thickness, diameter, process... all details were clearly listed. Why didn't they respond? I asked a friend, and he laughed. He pointed to a number: 1000. What's wrong with ordering 1000 tons at once? My friend laughed even harder and asked: "Do you know how much a steel mill produces in a month? 100,000 tons. You bring a 1000-ton order to them; it's not even worth their time to reply to your email." What if I ordered more? Can your cash flow handle it? With such a big project and long timeline, not to mention the cost of steel itself, do you know how many digits the transportation and storage costs would be? What if I built a good relationship and asked them to accommodate a 1000-ton order? Still no. Steel types are so varied, and your requirements are so specific. Even if they have a personal connection with you, they'd have to spend manpower and resources to change the rolling mill and adjust specifications. What? So complicated? Then what? Go to bidding, go to middlemen. But if middlemen take a cut, wouldn't costs go up? No, on the contrary, middlemen taking a cut can sometimes help you reduce costs. What do I mean? You know group buying. When many buyers' demands are "united" into a larger order, given to the seller, it increases bargaining power and lowers the price. Middlemen work the same way. You see, you can't make last-minute detailed requests to a steel mill, but steel traders can submit plans to the mill in advance, arrange ahead, and ensure you get the specifications you need. More importantly, when you bring your 1000 tons to a steel trader, they combine it with other clients' needs, turning it into a 10,000-ton order, so your unit price naturally becomes cheaper. Plus, you save on hidden costs. They advance the steel funds, absorb inventory pressure, and even deliver the steel to your site on time and as needed. Yes, the middleman takes a cut. But you also achieve small-scale, low-cost procurement that would otherwise be difficult.

In the end, you're not only not humble, but also more cost-effective. This is the core value many middlemen still have when the upstream is highly concentrated: helping you achieve small-scale, low-cost procurement. But that's not all. The kind of middleman I fear not having also possesses another capability: quality control.

Safety and Quality Guarantee

Once, a student who did livestream sales told me: In livestream commerce, I'm not afraid of poor hosting skills or insufficient supply chain resources; I'm afraid of quality control failing. Why? Because with the first two, as long as I work hard, I can master them. If problems arise, it's just a matter of not doing well enough, and I can keep trying. But quality control is different. In livestream sales, we're in the trust business. Quality control directly affects trust. If quality control fails and one product has issues, all the other 99 products you sell will be questioned. Once doubt begins, trust ends—completely. This isn't a matter of not doing well enough; it's a catastrophic issue. Look at past trending topics—isn't it always like this? No matter how big you are, one product scandal can bring down the entire livestream room. Whether you're a big star with many fans, or you've achieved great scale and have strong capital, if you want to keep doing this business, you must be extremely cautious about quality control.

But quality control is precisely where tricks can be played. There are many brand owners, but even if 99 are reliable, there's always that one unreliable. With one slip, any detail—ingredients, specifications, efficacy, qualifications—could be problematic. You need to be very professional to ensure a product is fine. But we select hundreds of products daily, and the industries and product knowledge involved are vast. How many purchasers would a small livestream room need to hire to handle all these issues? Even worse, even if we do our utmost in sample inspection, problems can still occur. Because some brand owners send excellent samples; we review them, approve, and put them on the link. But the products they ship to consumers might be something else entirely. This is almost impossible to prevent. Once it happens, it's a big problem. So what to do? How to avoid these issues? Let me give another example.

Once, during product selection, we chose a luxury bag. The sample arrived, our team inspected it meticulously—all details matched, it was authentic, so we put it on the link. But once the products were shipped, we discovered a problem: the shipped products were counterfeit. However, our livestream room didn't suffer a catastrophe. Because we detected it immediately, and before things escalated, we did a recall and clarification in time, preserving our reputation and making the supplier bear the consequences. How did you detect it in time? Through a middleman. The MCN agency we work with detected the problem in time. To be fair, that luxury bag supplier had been quite sneaky. In cities with the brand's flagship stores, they shipped authentic products because consumers might take them to the store for verification. In other cities, they shipped fakes. Fortunately, these MCN agencies, which have dealt with hundreds of brand owners, are very experienced and truly professional. So before putting the product on the link, they had already anticipated the risk and prepared. For example, they even did this: they deployed their own people in hundreds of cities across first-, second-, third-, and fourth-tier areas. These people would purchase products from partner livestream rooms every time, whether new or old brands, big or small. After purchasing, they'd compare with the samples and report any issues immediately. Such a cumbersome task is beyond our livestream room's capacity. Fortunately, they helped us to this extent, so we could detect problems in time. Otherwise... well.

In Conclusion

People say it's best to have no middlemen taking a cut. But the 24-hour convenience store at your doorstep observes your needs every day, helps you select cost-effective products, and starts stocking before dawn so you can buy whatever you want at 3 a.m. The middleman who brings beef jerky from the grassland to the supermarket diligently sources products on the grassland every month, then travels thousands of kilometers to bring them to coastal supermarkets so you can enjoy them just downstairs. Many more middlemen lie in the supplier databases of enterprises, quietly connecting both sides of transactions. Many top-tier middlemen may not be eloquent, may not hold their liquor well, or may even have bad tempers, but their legs and eyes for the market are sharp. Whenever you need something, they can connect you.

What value does this connection have? At least three kinds:

Shielding you from upstream complexity. Enabling small-scale, low-cost procurement. Guaranteeing your safety and quality.

Did you notice? Behind middlemen taking a cut is cost reduction and efficiency improvement. What's reduced? Your transaction costs—lowering your unit price and risk, saving your time and energy. What's increased? Your connection efficiency—making the upstream sellers, downstream buyers, and everyone in the business world more convenient and effortless. Taking a cut is just the middleman's profit model. Earning that cut through cost reduction and efficiency improvement is the middleman's business model. A few days ago, the Fortune Global 500 released its latest list, and topping it, ahead of all companies, was a middleman: the American retail giant Walmart.

Well, topping the list is fine.

Because what I fear most is having no middlemen taking a cut.