Demand side EFFICIENCES

•Facilitation of search
Middlemen would go to various farms to find tea to sell.

•Farmers to Refineries
Sorting : Middlemen identified tea harvests with similar species and
quality
Allocation : Middlemen divided the harvests into homogenous lots
according species and quality.
Accumulation : Tea harvests was a heterogenous in nature with 25
species.Middlemen brought in different species and types of tea from
different farms from all over
Assorting : Refineries may ask for an assortment of products w.r.t to
species and quality.Middlemen provided this assortment.
 Supply side EFFICIENCIES

• Routinization of transactions
Middlemen knew the farmers, types of tea harvests and which refineries
to approach for sale of the tea harvests.They kept the cycle running from
the farmers to sorting their lots according to the need of refineries and
then sold it to the refineries.To keep this cycle running they also visited
farms personally.

• Reduction in number of contacts

Middlemen brought down the number of contacts from 120,000 ( 60 x
20,000) to [ 20,000 + (60 x 280 x n) ] where
20,000 = no.of farmers 60 = no.of refineries
280 = no.of middlemen n ~ 25 =no.of species of tea
 Circumstances for ELIMINATION of
MIDDLEMEN
• Number of tea species
If the no of tea species was one or very few or the middlemen themselves
dealt with only one kind of species in that case elimination of
intermediaries would be feasible. Farmers would take the tea harvests
directly to refineries as task of sorting and separating into homogenous
lots of the harvests would be eliminated.

• Number of contacts
Farmers would in a hypothetical situation grow only one type of tea or a
few varieties and converge at a common point (ex.market) where they
could interact with the refineries and their specialists themselves
directly.This would reduce the no. of contacts considerably.