4 ms·

Intrigued by how can it be cost competitive for the middle men, why aren't small business selling directly? Is the sales part the only edge of middle men?

edent 10y ago
Because a small company has the ability to supply cleaning to X square metres across one city. A middle-man can say "We will supply your cleaning in several cities no matter your office size." So a company pays a higher cost - but only has to deal with one contract, which saves them effort elsewhere. It's the same as taxi companies. It would be cheaper for you to call a small firm with lower overheads, but you're happy to pay a premium for convenience.
- leni536 10y ago
  Hmm, Uber for office cleaning?
  - flukus 10y ago
    So the yellow pages was basically just an uber uber?
- flukus 10y ago
  A lot of this played out with single location companies and single city contracting companies (before they start merging). So I don't think that's the reason. I suspect it was cost. The middle men would just under bid and then under deliver.
- djsumdog 10y ago
  You need the pigs. They're helping all the animals. That horse isn't really going to the glue factory. We just reused that glue factory truck, but really he was going to a retirement home (paraphrasing Orwell's Animal Farm). When people plant themselves in the middle, they essentially sell themselves as being necessary. Are they necessary? It depends .. but usually not.
  - DomreiRoam 10y ago
    Middleman have some utility but I think often they extract more money than the value they provide.
- jaclaz 10y ago
  I see it in a slightly different angle, it is the company's Chief Officer for Cleaning Matters ;) that manages to work less (have convenience) at the expense of the company which pays more money for the service (besides the wage of the COCM ). Coincidentally that is also the same person that will convince everyone else in the company on how convenient the "global" contract is. There are a lot of activities for which sub-contracting makes sense, particularly when there are possible economies of scale, but when the activity is merely (or largely) labour, there are only four possible overall outcomes: 1) the actual workers are paid less than what would be fair 2) the service is inferior to what was expected/agreed upon 3) the service costs more (the middlemen somehow have to take their part) 4) the contractor or sub-contractor has made wrong estimation of the costs and before or later they close or go bankrupt
- trprog 10y ago
  >So a company pays a higher cost - but only has to deal with one contract, which saves them effort elsewhere. They have fewer contracts at any given time but also the contracts can last longer. If I directly hire people to clean an office, when they don't want to do it anymore I need to find other people to do it. Selecting people, negotiating, getting payments set up with accounting etc. Its a distraction from more important stuff so I want to do this as rarely as possible. If I hire a company/agency/middleman they can replace people without me having to even be aware its happening. At the point "keep the office clean" is essentially solved. Its possible I will never need to think about office cleaning ever again and I can get on with running my business.

edent 10y ago

Because a small company has the ability to supply cleaning to X square metres across one city. A middle-man can say "We will supply your cleaning in several cities no matter your office size." So a company pays a higher cost - but only has to deal with one contract, which saves them effort elsewhere. It's the same as taxi companies. It would be cheaper for you to call a small firm with lower overheads, but you're happy to pay a premium for convenience.

leni536 10y ago
Hmm, Uber for office cleaning?
- flukus 10y ago
  So the yellow pages was basically just an uber uber?
flukus 10y ago
A lot of this played out with single location companies and single city contracting companies (before they start merging). So I don't think that's the reason. I suspect it was cost. The middle men would just under bid and then under deliver.
djsumdog 10y ago
You need the pigs. They're helping all the animals. That horse isn't really going to the glue factory. We just reused that glue factory truck, but really he was going to a retirement home (paraphrasing Orwell's Animal Farm). When people plant themselves in the middle, they essentially sell themselves as being necessary. Are they necessary? It depends .. but usually not.
- DomreiRoam 10y ago
  Middleman have some utility but I think often they extract more money than the value they provide.
jaclaz 10y ago
I see it in a slightly different angle, it is the company's Chief Officer for Cleaning Matters ;) that manages to work less (have convenience) at the expense of the company which pays more money for the service (besides the wage of the COCM ). Coincidentally that is also the same person that will convince everyone else in the company on how convenient the "global" contract is. There are a lot of activities for which sub-contracting makes sense, particularly when there are possible economies of scale, but when the activity is merely (or largely) labour, there are only four possible overall outcomes: 1) the actual workers are paid less than what would be fair 2) the service is inferior to what was expected/agreed upon 3) the service costs more (the middlemen somehow have to take their part) 4) the contractor or sub-contractor has made wrong estimation of the costs and before or later they close or go bankrupt
trprog 10y ago
>So a company pays a higher cost - but only has to deal with one contract, which saves them effort elsewhere. They have fewer contracts at any given time but also the contracts can last longer. If I directly hire people to clean an office, when they don't want to do it anymore I need to find other people to do it. Selecting people, negotiating, getting payments set up with accounting etc. Its a distraction from more important stuff so I want to do this as rarely as possible. If I hire a company/agency/middleman they can replace people without me having to even be aware its happening. At the point "keep the office clean" is essentially solved. Its possible I will never need to think about office cleaning ever again and I can get on with running my business.