What is 'disintermediation' and does it help producers?

Disintermediation is when the intermediates are removed from the distribution channel; a few examples of intermediates are agents, wholesales and retailers. Therefore in that distribution channel there are no intermediates and the products are provided from the manufacturer straight to the consumers, therefore businesses will be required to deal with each customer directly. An example would be is a farm as a manufacturer this is because the goods will be produced there and the customers will be able to visit the farm and collect the products from there or have it delivered to their house.

Disintermediation can help producers in several ways. Firstly it provides the consumer with convenience this is because they will have easy, simple and direct access to the goods and services that are provided by the business. It could also mean that the businesses reputation and profitability will increase this is because they are able to widen their target audience and they can find ways of attracting new customers as well as retaining existing customers hence an increase in sales. It can help create a better reputation because they will be able to develop a good relationship with their customers and gain customer satisfaction and loyalty. It could also imply lower prices this is because the number of processes and transaction that take place in the distribution chain is reduced and the amount of money that has to be provided could be decreased.