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Definition of 'Middleman'

A middleman is a person or company that acts as an intermediary between two other parties in a transaction. The middleman typically charges a fee for their services, which can be a percentage of the sale price or a flat fee.

Middlemen can be used in a variety of transactions, including sales, purchases, and leases. In a sales transaction, the middleman may act as a broker, representing one party to the transaction and negotiating the terms of the sale. In a purchase transaction, the middleman may act as a buyer, purchasing the goods or services from one party and then reselling them to another party. In a lease transaction, the middleman may act as a landlord, leasing the property from one party and then subletting it to another party.

The use of middlemen can have a number of advantages, including:

* Reducing the cost of transactions: Middlemen can often negotiate better prices for goods and services than the parties themselves can. This is because they have more experience in the market and are better able to understand the needs of both parties.
* Providing expertise: Middlemen can provide expertise and advice to the parties involved in a transaction. This can be helpful if the parties are not familiar with the market or the terms of the transaction.
* Reducing risk: Middlemen can help to reduce the risk of a transaction by providing a layer of protection between the parties. For example, a broker may be able to help a buyer avoid a fraudulent seller.

However, the use of middlemen can also have a number of disadvantages, including:

* Increasing the cost of transactions: Middlemen typically charge a fee for their services, which can increase the cost of the transaction.
* Creating a conflict of interest: Middlemen may have a conflict of interest between the parties they are representing. For example, a broker may be more interested in maximizing their commission than in getting the best price for the buyer.
* Delaying transactions: Middlemen can sometimes delay transactions by adding unnecessary steps to the process.

Overall, the use of middlemen is a decision that should be made on a case-by-case basis. There are a number of factors to consider, including the cost of the transaction, the expertise of the parties involved, and the risk of the transaction.

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