What Is a Brokerage?
Brokers are facilitators who work in many industries to bring together those who supply and those who demand. While the word "brokerage" commonly raises the specter of Wall Street, other brokerages help to keep diverse sectors of the economy running.
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History
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A modern day equivalent of the medieval "brocour" is the "thanks for your business" gift. The word "brokerage" is rooted in the Middle English term "brocour," which was a token gift exchanged at the completion of a business deal. A similar term, the Arabic "al-barka," means blessing or divine favor.
Identification
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A brokerage is a firm that employs brokers. Brokers act as go-betweens to negotiate merchandise purchases, service contracts, or product sales for a fee, a percentage of the deal, or both. A brokerage typically serves two clients in each negotiation: the supplier of the commodity, and the purchaser of the commodity.
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Types
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A marriage made in heaven, or negotiated by a broker? Stock brokerages procure and sell shares of publicly traded companies for corporate or individual clients. Service brokerages put together custom service packages from various providers to clients' specifications. More examples of brokerages include food, insurance, travel, mortgage and marriage brokers.
Considerations
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Often, a manufacturer needs expert assistance to introduce products to new markets. Store owners are more likely to take on a new product line if it is professionally marketed directly to them. A brokerage specializing in niche markets has the knowledge and marketing skill to serve both sectors of the economy.
Famous Ties
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A good brokerage can make good money legitimately, too. Bernard Madoff is perhaps the most famous stock broker of late. Unfortunately, rather than acting as a middle man to invest his client's money wisely, their bucks stopped with him.
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References
- Photo Credit stocks and shares image by Andrew Brown from Fotolia.com gift image by Photoeyes from Fotolia.com wedding image by Mat Hayward from Fotolia.com dollars image by peter Hires Images from Fotolia.com
