Are you looking for a low-cost way to get in on the Internet action?
Cutting out society's "middlemen."

Are you looking for a low-cost way to get in on the Internet action? Here's a suggestion: Cut out society's "middlemen."

Rather than be one of the countless virtual vendors of undifferentiated products or services that are struggling to make a profit, you can take a cue from some of the truly successful online enterprises. You can bring buyers and sellers closer together by eliminating, replacing or reinventing the traditional role of middleman.

Take Dell Computer, for example. Michael Dell realized that consumers and business people had a problem: No place to get a reliable, state of the art computer system built to their specifications delivered to their doorstep quickly at a price that made sense.

Sure they could go to one of the physical computer discount retailers. But that would mean having to settle for an off-the-shelf system that may not meet their needs. Or it would mean having to put up with sales pressure to buy an overpriced extended warranty or other unwanted add-on. Or it would mean having to put up with outright incompetence from underpaid, poorly trained employees.

So Michael Dell solved all those problems by cutting out the middleman and made himself one of the wealthiest people in the world. Bye-bye computer superstores and mom and pops! offers car and truck buyers the ability to bypass the traditional buying process by letting people buy or lease the new or used vehicle of their choice for the lowest possible price from a nearby participating dealer. Customers do this from their computer terminals with no high-pressure sales. Buyers can even get financing and insurance at the same time. Auto-by-tel gets fees from their dealer network and is processing more than 100,000 transactions per month. Bye-bye car salesmen!

Then there's, through which you can purchase airline tickets using a bid process. You submit your itinerary and Priceline tries to buy your tickets for the price you specify. If you do a little fare research and you're a little flexible in your travel dates, you can save hundreds of dollars on your tickets. Priceline makes money on the spread between the customers' bids and the actual price of the tickets. Bye-bye travel agents!

Some forward thinkers have created entirely new middleman businesses. Top Hosts, is the Web's largest free directory of Web hosting providers. Top Hosts helps businesses easily compare the services and pricing of various hosts. Top Hosts currently has over 500 Web hosting services in its comparison database, and expects to be at 1,500 listings by the end of this month. Top Hosts makes money from advertising revenue paid by its host listings. This kind of middleman didn't exist three years ago. Hello opportunity!

Okay, so you don't have the capital to be a Dell, Auto-by-tel, Priceline or TopHost. How can you get in on this middleman metamorphosis?

The key to supplanting traditional middlemen is to identify problems and frustrations associated with them and replace those problems and frustrations with convenience, speed, savings, peace of mind, courtesy, flexibility, choices, privacy and follow-up. Or better still, give your market all these things and more!

Another role for the new breed of middlemen is to identify and provide complementary but non-competing products and services through existing companies that their customers are probably buying anyway from someone else.

These could be things like travel accessories for the airline ticket buyer; training and maintenance for the computer system buyer; or marketing strategies and tactics for Web site owners.

Or you could align yourself with organizations that already have thousands of members, affiliates, readers, listeners, viewers or customers. Then approach providers of beneficial products and services - like insurance, long distance, credit cards, etc. - and offer the buying power of thousands in exchange for lower prices and a piece of the action for yourself.

Yet another option for Internet intermediaries is to create entirely new products and services that meet previously non-existent needs.

Innovative entrepreneurs now provide escrow services for online auction buyers and sellers; they manufacture stick-on URL nameplates for your car; and they create postcards of your home page to mail to prospective customers.

Will you be the next Michael Dell? You might be if you can carve out your Internet market niche. Why not explore opportunities to reinvent the middleman!

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Last modified: November 08, 2002