Monday, November 24, 2008

What Good is the Middleman? Super Broker Shuffle

If you like found video footage and terrible super bowl shuffle videos, I recommend the You Tube video linked below. The video is a promotional spot for the Southern Food Brokerage. It appears that including bad rapping, food brokers help get products into grocery stores from the video. I’m not sure on the accuracy of this write up of food brokerage, but it claims that food brokers can make 45-50 thousand dollars a year with only a high school education. It is a sales driven job, so those earning can vary a lot.

From an economic stand point why do we want middlemen. Their salaries must be paid so we can get our Ortega taco shells and A1 steak sauce in our grocery stores, but wouldn’t are groceries be cheaper without them (or we cut out the middleman.)

In econ 101 it is generally assumed there are no transaction costs, and everyone knows all the goods available and at what price. But in real life a grocery store must choose among 1000s of products, by paying a broker a grocery store may gain access to knowledge about these products.

However, over time we have cut out the middleman. This brief description of food brokers by Steve Hannaford shows the number of food brokers had decreased to 3 by 2003. Unfortnatly Southern Food Brokerage is no more, it was bought by Crossmart in 1991.

It lives on in the Super Broker Shuffle, watch and enjoy!

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1 comment:

New Zealand Supermarket said...

This is acceptable that an industry so vast and diverse requires a wide range of participants to flourish. Some of the titles of the players in the freight brokerage business may be a bit perplexing, and some of their responsibilities may overlap.
New Zealand Supermarket