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When you pay $20 for a product that only costs $4 to make, you’re not just paying for materials. You’re paying everyone who touched it along the way, including traders, platforms, distributors, and brokers. Each one adds a fee, driving the final price far from the starting point. That is what a middleman markup is.
For many industries, this extra cost has become somewhat of a serious burden. Blockchain technology could potentially be the solution to reduce these layers, allowing retail platforms to deal directly with the source.
How well does this idea work in practice? While blockchain technology is flexible, does it allow retailers or consumers to trade directly, without handing off control or money to someone else in the chain?
Why Blockchain “Cuts Out the Extra Fat”
Blockchain works like a shared digital record that everyone can access and verify. Instead of going through a bank, broker, or platform, people can trade directly with each other. Each transaction is added to a public chain where it stays visible and secure. That level of transparency builds trust without needing a middleman.
Some blockchains support smart contracts, which are self-running agreements that activate when certain rules are met. These cut out the need for paperwork or long waits for someone to confirm the terms. They also help avoid extra processing fees that often stack up in more traditional systems.
This tech is already being used in supply chains. Platforms like VeChain track how goods move from source to shelf. Retailers can confirm where an item came from. Buyers know exactly what they’re getting. There’s no need to bring in extra parties just to prove a product’s journey.
It’s also changing how people use money online. In online casinos and sports betting platforms, for instance, Wilna van Wyk’s specialist view on bitcoin betting sites demonstrates how these online gambling platforms cut out the usual payment middlemen, banks, card processors, and e-wallets. Without them, fewer fees are draining the transaction. Players usually just pay a small network charge, which depends on how busy the blockchain is at that moment.
That means more of their money actually goes toward playing, not to third parties. Many operators even pass on what they save by offering better odds or more generous rewards. This setup shows exactly what blockchain is designed to do: remove extra steps, reduce costs, and keep more value where it belongs.
Why the Markup Exists
Middlemen don’t just appear for no reason. In many cases, they step in because buyers and sellers don’t know or trust each other. They help move goods, handle payments, deal with customer issues, and carry the risk when things go wrong. That essentially is the trade-off. Convenience in exchange for a cut, but the size of that cut can be shocking.
For instance, a smallholder farmer growing coffee may only receive around 10% of the final retail price. According to FAO and UN data, producers in global agriculture often keep less than 15% of what the product sells for in shops. The rest disappears up the chain.
The same issue exists with concert tickets priced at $100. These very tickets can end up costing $160 or more once they go through Ticketmaster, resale sites, and transaction fees, with some markups stretching 200%. That’s the problem. These layers, including geopolitical impacts and inflation, often take more than they give.
How Blockchain Actually Reduces Costs
Blockchain has specific tools that do this in practice. The first is direct transactions. When people or companies can deal with each other without going through a bank, a payment processor, or a broker, the fees drop immediately. You’re not paying for approval or access. The system does that on its own.
Next is automated contract handling. Smart contracts don’t sit in drawers or wait for someone to read the fine print. They’re written in code and trigger actions as soon as the conditions are met. That means no extra hands are needed to check terms or release funds. It’s faster, and it keeps people honest.
Blockchain’s open nature of the system allows you to follow a product from where it was made to where it ends up. That removes the need for a long line of people to verify its journey. Brands use blockchain to show proof of origin in real time, tracking everything from wine shipments to designer handbags. Buyers don’t have to take someone’s word for it. They can check the chain and see it for themselves. What you end up with is fewer steps, fewer fees, and trust built into the system itself.
How Blockchain is Solving Real-World Issues
Blockchain is already being used to solve real problems where too many layers have made industries slow, expensive, or unfair.
In agriculture, IBM Food Trust is helping big retailers like Walmart trace the origin of food. One standout case involved tracking leafy greens after a contamination scare. Before blockchain, it could take a week to figure out where the vegetables came from. With blockchain, it took just 2.2 seconds. That kind of speed can prevent waste, protect public health, and cut the costs of recalls.
In fashion, the Arianee platform lets brands offer digital “passports” for luxury items. This gives proof of ownership, tells the history of the product, and even makes resale easier, all without using a middleman platform. Buyers don’t need to go through a third-party site to confirm an item’s real. The chain tells the story, and the buyer has control.
In ticketing, GUTS Tickets, based in the Netherlands, uses blockchain to issue digital tickets that can’t be duplicated or resold at inflated prices. That means no scalping, no bots, and no fake listings. According to company data, GUTS events have seen a sharp drop in unauthorized resale, and artists and venues keep control over pricing and access.
These examples show one thing: when blockchain is used in the right places, it can pull out the extra layers without slowing things down or breaking trust.
Why It’s Not a Fix for Everything
As useful as blockchain sounds, it doesn’t solve every problem. Some middlemen exist for a reason. For example, someone still needs to store goods, follow local laws, and step in when disputes happen. A farm-to-table system can run on a digital ledger, but if the delivery truck breaks down or a payment fails, you still need people to step in and sort it out.
There are also problems with getting this specific technology off the ground, like issues surrounding scalability and the slow pace of adoption. Many businesses don’t fully understand how blockchain works, and setting it up takes time, money, and training. Some people are also uneasy about the coins and tokens used in certain systems. If values swing wildly, it adds new risks.
There’s also the impact of regulations to consider. In some countries, blockchain projects face legal grey zones or are blocked outright. That slows progress and creates gaps in how it can be used.
Some believe in not removing middlemen, but believe blockchain just adds new ones in the form of developers, platforms, or even exchanges. If you still need a third party to help you use it, is it really cutting anything out? While the potential is real, the results depend on how and where it’s used.
Conclusion
Blockchain can shrink costs in industries where too many people take a slice without adding much value. In areas like food, fashion, or entertainment, where trust, speed, and price all matter, it’s already making a difference. At the end of the day, some layers still serve a purpose, and others can’t be replaced by code. However, when the markup gets out of hand, when the process is slow, or when trust is thin, blockchain gives people another way to work together.
Image Credit: Graphic concept with percent symbol | Free Photo