This is a VERY long post, but keep with me. This should be common knowledge, but many people seem to forget this when confronted with the arguments of a broker with the smell of dollars in their nose. So... if you're buying traffic now, maybe read this and realise that you're being $hafted.
Everyone knows that brokers exist only to make a profit, if there was no profit in brokering traffic, then all the brokers would quit.
An example, giving by a member on this board, of buying a television from Walmart is faulty, at best. This person claims it is better to buy from Walmart than get to their suppliers, because Walmart buy in bulk, and so, get a lower price than you could ever get from the supplier. I'll elaborate later.
Unless their margin is a few cents, unlikely, then it would be a better deal to get directly to the supplier for two reasons.
I'll explain those in a second. But for now, cutting out the middle man is the business model of many successful finance, insurance, and electrical suppliers. They don't only supply their product, but they also manufacture it. An example of this would be CIS - probably the United Kingdom's largest and most successful insurance company. Although their goods are intangiable - much as traffic is - their business model is that of cutting out the middle man. They have A LOT of brokers. Zurich is a broker, and their rates are insane. Of course, if a customer went directly to CIS, they wouldn't get as good a deal as Zurich do, but they'd still save money.
So the first, and most beneficial aspect of cutting out the middle man is to get a lower price. Whether it is a thousand dollars, five dollars, or a few cents, it doesn't matter, as long as the price is lower.
Example. I went to Jessops Camera Store today and looked at the Canon Powershot G2. The price was £650.
If I could get direct to the supplier, I could get a lower price than that. Of course, the price I got would never be as good as the price that Jessops Camera Store pays for their stock. But the price would be less than the price they charge me. If Jessops go to their dealers, maybe they get their cameras at £400. If I go to the dealer, I'd have to pay £600. But, the price is still less than it would be if I bought from Jessops.
The supplier can and does not sell at a higher price to customers than they sell to their brokers. It would defeat the whole purpose of them running a business.
If the production cost of a camera is £100, and the supplier sells to me at £600, they make a profit of £500.
If the production cost of a camera is £100, and the supplier sells to Jessops at £400, they make a profit of £300.
It is more profitable to sell directly to me, even if it is at a higher price.
If you cut out the middle man, you ALWAYS get a better deal. There is no two ways about it.
The supplier would NEVER sell to me at a higher price than Jessops do. Because that encourages me to go to Jessops and buy a camera. And the supplier only makes a profit of £300 when Jessops buys from them. It is better to sell to me at a price SLIGHTLY less than Jessops do, but make a much larger profit.
It is the same principle with traffic brokers.
The second advantage to cutting out the broker, is to reduce the margin of error. Let us say that I'm buying 1000 visitors from you every day. If there is a problem with that traffic, I have to contact you. Then you've got to contact the dealer and say "hey, whats the deal with your traffic?". If I cut you out, I can mail the dealer directly and get a reply directly from the horse's mouth.
Whereas it may take you 5 hours to see my mail, and another 5 hours for the dealer to see your mail, then 5 hours for you to see the dealer's response, then 5 hours for me to see your response, there is 20 hours in total.
If I cut you out and get directly to the dealer, he takes 5 hours to see my mail, and 5 hours for me to see his reply. A total of 10 hours. Hence, the margin of error is reduced.
Just like if I buy from the camera store, and there is a problem with my camera. Lets say, a component breaks. I need to take it back into the store, who will then send the details to the dealer, who will return a component to the camera store, which I will need to go and pick up. If I cut out the camera store, I get direct to the dealer. I send them the details of the problem, they send the components right back to me. The margin of error is reduced, and the time for the problem to be fixed is reduced..
It is the same with traffic brokers, as you can see above.
Cutting out the middle man is the successful business model of MANY companies. I can't even think of an unsuccessful business that uses that model. Just like the insurance company CIS, online car dealers that cut out the middle man, or even the movie BLOW where George Jung cuts out the marijuana dealer and gets direct to the source in Mexico, cutting out the middle man DOES work.
And that ladies & gentlemen, is why you shouldn't use brokers. Ever. Of course brokers are going to protect their business - they make money from it. Brokers exist ONLY to make a profit. If you're a newbie and don't want to have to negotiate, or don't know HOW to negotiate prices with a dealer, then you're probably better to stick to a broker. But you'll be wasting money.
Get a better deal and cut out your broker.
Opinions?