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Disintermediation and internet distribution

Have you ever heard of the term DISINTERMEDIATION?

This means to flatten an organization - removing one or more links in the distribution chain. In recent years, the internet has been a source of disintermediation as products traditionally sold through physical retail outlets can now be distributed directly from the manufacturer directly to the consumer - eliminating the MIDDLE MAN. By eliminating the middle man the price of the product can be reduced.

Please help identify a product now offered directly over the internet that used to be available only through a separate retailer. (Indicate the website where you found this product).

(Be careful with this question as internet retailers - e.g., Amazon - and websites sponsored by traditional retailers - e.g., macys.com - do not constitute disintermediation, but only replace or complement traditional physical outlets.)

Explain the advantages and disadvantages associated with internet distribution for this product.

Solution Preview

One product that can be purchased directly through the internet that used to be available only through a separate retailer, is cars. In the past, customers would physically travel to car dealers, who were located at brick and mortar buildings, to haggle and buy cars. In more recent years, companies such as Tesla Motors have been changing the way cars are sold. The dealers, who use to be the middlemen, are gradually being eliminated. Car sales have gone through disintermediation, where the car dealers are removed from the distribution chain. Customers are now able to purchase cars manufactured by Tesla Motors, over the internet. Note, however, that cars manufactured by Tesla Motors, ...

Solution Summary

This solution discusses disintermediation and internet distribution in 430 words. Three sources are cited.

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