DISINTERMEDIATION

Disintermediation

Disintermediation is the removal of different elements with in the middle of supply chain. It
means you can deal directly with you consumers
Instead going through traditional distribution channels which had some type of intermediates
 Distributor
 Wholes sellers
 Broker agent
Via Internet

 Companies may now deals with every customers directly via internet
 One important factors is a drop of cost of servicing customers directly
 Online disintermediation often attempts to cut out the wholesaler and retailer and can sell
products directly from the manufactures
advantages

 Giving consumers more direct access to goods and services

 Lower prices and discounts
 Fees charges for distributors and logistics providers are eliminated or sharply reduced
 Ecommerce made it possible for many companies to begins selling directly to consumers
How it works
 Disintermediation has been an important strategy for many big box retailers like Walmart
which attempts to reduce prices by reducing the number of intermediaries between the
supplier and the buyer
Disintermediation examples

 Walmart
 Amazon
 daraz
 Uber
 Airbnb
Example of Disintermediation

 The travel industry has been transformed by disintermediation, mostly through the internet.
 Airlines introduced direct flight bookings
 online sites including PRODIGY and CompuServe.
 Online travel booking is a perfect example of disintermediation.
 Airbnb
 OYO room
 Disintermediation includes dell apples which sells many of their systems direct to the
consumers
 By passing traditional chain
 Creating brand value
 Profit and continues growth
Risks in Disintermediation

 Absorbing additional costs

 retailer out,
 spending more money on shipping your product to the consumer directly
 Reduced brand awareness
Disintermediation can also risk your brands’ awareness. If your brand isn’t competitive enough
and eliminates the retailer stores, the brand will not receive nearly as much attention,
jeopardizing its future.
 Smaller market potential – In many instances, people will go to the big-box retailers
looking for specific products. If they don’t see your particular brand, they will go with the
competition. You can avoid this situation if your brand has already created a community of
followers, as they will be more loyal to the brand.