Monday, 7 December 2009

what is disintermediation and does it help producers?

Whats is disintermediation?
disintermediation is the removal of the middle man in a supply chain. Instead of going through traditional distribution channels, which had some type of intermediate (such as a distributor, wholesaler, agent), companies may now deal with every customer directly, for example through the Internet. One important factor is a drop in the cost of servicing customers directly. So what this means is that the buyers are aware of supply prices direct from the manufacturer. Buyers bypass the middlemen (wholesalers and retailers) in order to buy directly from the manufacturer and thereby pay less.

disintermediation does help allot of producers if they are selling there product straight away after they make it as it means they don't have to sell it as cheap as possible to a distributor and then so on, and this helps them as they can sell there product directly to the customer this means there is no middle man and also both customer saves money and the manufacture also makes more money. Also another thing is that the product don't have to go through so many stages and also some products get damaged.

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