Disintermediation

Description of Disintermediation. Explanation.

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Definition Disintermediation. Description.

Disintermediation is the removal (or obsolescence) of an intermediary role in the value chain between manufactures and consumers. For example:

The classic disintermediation of computer retailers and resellers by PC-manufacturer Dell through selling direct to end users via the Dell website.
An airline selling tickets direct to the public over the internet, thus cutting out the travel agent in the selling process.
Amazon.com for books and CDs.

Major advantages of disintermediation are lower cost for the end consumer, plus shopping-convenience for the consumer who does not want to leave home.

Typical intermediaries in the value chain include: distributors, wholesalers, brokers, agents, resellers and retailers.

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End of description Disintermediation. An explanation.