So, Mixers provide service of shuffling bitcoins or provide addresses loaded with bitcoins along with private keys. In short, they provide service so to create anonymity between sender's and receiver's address so that no one can trace the transaction.
My question is why not use Exchanges? When we deposit funds on exchange, bitcoins get deposited on exchange's cold wallet. But when we withdraw funds, withdraw gets processed from exchange's hot wallet. So in short, it is very easy to do anonymous transfer by depositing funds on exchange and withdrawing to other addresses. Why to pay 1-3% fees on Mixers when it could be done for much less on Exchanges. Exchanges like Binance charge just 0.0005 BTC to process withdrawals.
Well, it depends on the exchanges and the size of fund. People who prefer privacy will generally avoid the exchanges due to kyc and withdrawal limits. There is also the risk of fund being seized by the exchanges. It's quite hard to recover fund seized by exchanges that do not exist in ones country