Disintermediary

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.

BREAKING DOWN '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. Middleman

    A slang term for an intermediary in a transaction or process ...
  2. Distribution Channel

    The chain of businesses or intermediaries through which a good ...
  3. Disintermediation

    1. In finance, withdrawal of funds from intermediary financial ...
  4. Supply Chain

    The network created amongst different companies producing, handling ...
  5. Chain Store Sales

    An indicator that provides information on the monthly sales volumes ...
  6. National Retail Federation - NRF

    A retail trade association with members from all phases of retail ...
Related Articles
  1. Investing

    What's a Distribution Channel?

    A distribution channel is a chain of businesses through which a manufacturer sends his products to get them to a final buyer. It may involve wholesalers, distributors, agents and retailers. Companies ...
  2. Personal Finance

    Understanding Forward Integration

    Forward integration happens when a business takes over functions that were originally performed by its partners farther down the supply chain.
  3. Markets

    Consumer Spending As A Market Indicator

    What people buy and where they shop can provide valuable information about the economy.
  4. Markets

    Explaining the Supply Chain

    A supply chain is the cumulative network involved in moving raw materials, components and finished products from original suppliers to end users.
  5. Entrepreneurship & Small Business

    What Is The Difference Between A Direct And An Indirect Distribution Channel?

    After a firm makes its products, it must find an efficient way to deliver them to a retail store or customer’s home. Distribution channels fill that role.
  6. Insights

    Target Tells Suppliers To Move Faster Or Pay-Up (TGT)

    Target has begun cracking down on its vendors in an attempt to increase its supply chain efficiency, says a report.
  7. Investing

    Why Traditional Retailers Keep Struggling

    Here are some core reasons that the traditional retail industry is struggling today
  8. Investing

    Explaining Cost Control

    For a business, cost control entails managing and reducing expenses.
  9. Personal Finance

    The Future of Retail Is Not Big Box Stores

    The future of shopping involves a lot more Internet and a lot less window shopping at the mall.
  10. Personal Finance

    Consumer Discretionary Sector: Industries Snapshot

    Discover the consumer discretionary sector, industries within this sector and companies producing goods that fall under the consumer discretionary definition.
RELATED FAQS
  1. What are some ways to make a distribution channel more efficient?

    Understand what a distribution channel is and how companies use them to move product. Learn how to make a distribution channel ... Read Answer >>
  2. What is the difference between supply chain management and value chain management ...

    Discover what the principal differences are between utilizing a supply chain management system and a value chain management ... Read Answer >>
  3. How has electronic retailing (e-tailing) changed the consumer discretionary goods ...

    Learn how electronic retailing has changed the consumer discretionary goods sector. Even physical stores are forced to invest ... Read Answer >>
  4. What has the retail sector evolved to its current structure?

    Find out about the retail sector, the size of United States and global retail markets and why online retailers are changing ... Read Answer >>
  5. What factors are the primary drivers of share prices in the retail sector?

    Find out which factors investors need to consider when evaluating companies in the retail sector, including the basic fundamentals. Read Answer >>
  6. What are the primary risks an investor should consider when investing in the retail ...

    Learn about the primary risks of investing in the retail sector, such as bad economic conditions, regulation, competition ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center