Systems Economics Lexicon · Economic Agents and Relationships

With Inventory Intermediary

The intermediary taking inventory of the product and reselling it.

StatusSupporting term
SectionEconomic Agents and Relationships

Understanding With Inventory Intermediary

A With Inventory Intermediary is the only one of the three intermediary types that takes physical or legal possession of the product, as distinguished from the purely relational Agent and Payer Intermediary types. This category covers two distinct behaviors: reselling the enterprise’s product unmodified (e.g., Macy’s reselling manufacturer clothing, or an auto parts shop reselling Goodyear tires) and reselling it after further modification or incorporation (e.g., a car manufacturer like General Motors incorporating BorgWarner’s parts into a finished car, making the car manufacturer an intermediary rather than a customer with respect to BorgWarner’s product). The common test is counter-party status to the transaction combined with taking inventory. Beyond straightforward manufacturing or retail codings, the text also gives niche examples: rental and leasing businesses as Intermediaries with Inventory, and healthcare providers acting as such for distributing surgical implants.

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