Disintermediary

AAA

DEFINITION of 'Disintermediary'

Anything that removes the "middleman" (intermediary) in a supply chain. A disintermediary often allows the consumer to interact directly with the producing company. This cuts service costs from purchases made at a retailer and increases market transparency with regards to manufacturers' prices.

INVESTOPEDIA EXPLAINS 'Disintermediary'

Consumers who are thought to be knowledgeable on the difference in pricing from various dealers are able to directly purchase from the supplier, cutting costs normally incurred through the traditional distribution channel: supplier, manufacturer, wholesaler, retailer and buyer.


The internet is a good example of a disintermediary. Most companies now offer their products through online catalogs, where customers are able to purchase directly from online stores and save on time spent shopping in retail stores and talking with sales representatives. This is one example how a distintermediary can reduce costs for consumers.

RELATED TERMS
  1. Reintermediation

    1. Individuals withdrawing funds from nonbank investments such ...
  2. Financial Intermediary

    An entity that acts as the middleman between two parties in a ...
  3. Supply Chain Management - SCM

    Supply chain management is the streamlining of a business' supply-side ...
  4. Supply Chain

    The network created amongst different companies producing, handling ...
  5. Disintermediation

    1. In finance, withdrawal of funds from intermediary financial ...
  6. Middleman

    A slang term for an intermediary in a transaction or process ...
Related Articles
  1. Vital Link: Manufacturing And Economic ...
    Fundamental Analysis

    Vital Link: Manufacturing And Economic ...

  2. Free Markets: What's The Cost?
    Insurance

    Free Markets: What's The Cost?

  3. What are Business Ethics?
    Investing

    What are Business Ethics?

  4. What is Globalization?
    Investing

    What is Globalization?

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center