Disintermediation

Definition

Disintermediation is the process of bypassing or eliminating intermediaries in a supply chain or sales line. This enables producers or service providers to interact directly with end users, which often results in cost reductions and more efficient processes.

Background

The term became popular in the 1990s with the advent of the Internet, which allowed companies to communicate directly with their customers and bypass traditional sales channels. The idea behind this is to increase control over the supply chain and reduce dependence on intermediaries.

Areas of application

Disintermediation is primarily used in sectors such as financial services, travel, retail and publishing, where many intermediaries are traditionally involved. Through the Internet and digital platforms, companies in these industries can offer their products and services directly.

Benefits

The benefits of disintermediation include lower costs for both providers and consumers, improved margins for manufacturers, faster response times to market demands, and more direct customer engagement. Companies are also gaining flexibility and control over their products and services.

Challenges

The challenges of disintermediation include the risk of losing proven sales channels, the need to build up your sales and marketing skills, and potential resistance from established middlemen. It also requires a strong digital presence and effective online marketing strategies.

Examples

An example of disintermediation could be an industrial company that sells its products through its own B2B retailer portal sold directly to end customers instead of relying on wholesalers. This allows the company to offer better prices and get direct feedback from end users.

Summary

Disintermediation enables companies to streamline their sales channels and build more direct relationships with their customers. Although this can bring significant benefits, it also requires significant adjustments in business strategy and operational processes.