Disintermediation

Disintermediation refers to the process of eliminating intermediaries or middlemen in a supply chain or transaction, allowing consumers to interact directly with producers or service providers. This trend has increased with the advent of technology, particularly the internet, facilitating direct transactions that were once facilitated by brokers or agents.

Disintermediation meaning with examples

• The rise of e-commerce has led to significant disintermediation in retail, where consumers can now purchase products directly from manufacturers, often at lower prices without the markup of traditional retailers.
• In the finance sector, disintermediation has occurred as individuals use crowdfunding platforms to raise capital directly from investors, bypassing banks and traditional funding methods, thereby enhancing financial accessibility.
• The music industry has experienced disintermediation through platforms like Bandcamp and SoundCloud, enabling artists to distribute their music directly to fans, retaining a larger share of profits than through traditional record labels.
• Disintermediation in real estate allows buyers to access property listings directly via online platforms, reducing the need for agents and providing more transparent pricing, which can benefit both buyers and sellers.
• In the travel industry, disintermediation is evident as travelers book hotels and flights directly through provider websites rather than relying on travel agents, often resulting in better deals and enhanced customer satisfaction.