E-Commerce Disintermediation

By Richard Rinaldo Konggoasa, NIM       : 2301884141

In a commercial context, disintermediation refers to reducing or eliminating the middlemen who stand in the way of direct transactions between two parties. By cutting out the reseller and selling straight to customers, vendors may get their products to customers quicker and more conveniently, which is another way of defining “disintermediation.” Disintermediation also means cutting out a middleman, like in the example above. It is also a concept that emphasizes cost savings, which is a competitive advantage that can be gained by eliminating the payment made to the middlemen, and more information from customers directly, which might help organizations make a better long-term decision. Also, in other sectors, disintermediation occurs when a business decides that eliminating the middlemen would boost its profits. Due to increased market transparency, many customers choose to purchase directly from the manufacturer or distributor rather than via a third-party intermediary such as a broker or middleman. Buyers may save money by purchasing directly from the manufacturers rather than via wholesalers and retailers, thereby avoiding the middleman. Buyers may also choose to purchase wholesale goods via B2C e-commerce companies, which are meant to link buyers and sellers.
The real estate market is a good illustration of how disintermediation works. Buyers and sellers often contact the real estate market in order to gather information and negotiate the sale of a property. When conditions were more transparent, buyers were able to save money since they no longer had the option of searching the property and had more options to pick from in the real estate transaction. Since the estate may be sold through social media, it will be easier for the seller and they won’t have to pay the intermediaries’ fee, increasing the efficiency of the sale process. As a result, real estate agents, appraisers and brokers who serve as intermediaries have a tougher time finding employment since their service no longer relevant because the seller has a better option to sell their property and thus shifts power from the intermediaries to the customers. Customers and sellers now have more power over the distribution of economic gains that may otherwise have gone to the market intermediaries or to the sophisticated and connected dealmakers of financial markets, thanks to the release of information from attorneys’ control. Real estate brokers and sellers might be at risk from the black side of the market, which could also be a dark side of the economic world and need governmental regulation of the industry.

References

Nwgugu, M. C. (2007). Issues In Disintermediation In The Real Estate. ResearchGate.

Steele, D. (2009). Disintermediaries and Reintermediaries by E-Business. Faculty CBPP UAA Alaska Education.