Disintermediation is the process of removing the financial middleman from a transaction. It may allow a client to buy directly from a wholesaler instead of via a retailer, or a firm to order directly from a manufacturer instead of through a distributor.
In the financial industry, it is common for an investor to purchase shares without going via a broker or financial institution. Disintermediation is commonly used to lower costs, accelerate delivery, or do both.
When a step in a product’s supply chain is eliminated, consumers should obtain a better price. In practice, crucial stages in the supply chain must still be completed by someone.
Disintermediation benefits both businesses and their consumers if essential actions can be completed more efficiently and inexpensively without the need of a middleman.
When a stage in the supply chain is removed, disintermediation happens. Rather than reserving through a website or a travel agency, a customer contacts a hotel directly to make a reservation.
What Is Disintermediation in Ecommerce?
The internet has been viewed as an excellent platform for disintermediation since its inception. It has the ability to cut out the middleman and put consumers and companies in direct contact with producers and wholesalers.
Most people turn to new intermediaries like Amazon to receive a wide range of options, excellent customer service, and quick delivery all in one spot.