Disintermediation

Disintermediation is a big term with a clear message and important consequences– the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries.  Disintermediation occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones.

Disintermediation is a reduction in the flow of funds into the banking system that causes the amount of financial intermediation to decline.

Disintermediation is the process of eliminating traditional intermediaries. Eliminating intermediaries has the potential to reduce costs since each intermediary must add to the price of the product in order to make a living.