Disintermediation

What is disintermediation?

Disintermediation is the removal of middlemen, such as wholesalers, distributors, or retailers, from a supply chain so that producers can sell directly to consumers. The term originated in finance in the late 1960s, when consumers began bypassing banks to invest in securities directly, and was later carried into commerce as the internet made it economically viable to skip traditional retail layers. In ecommerce and direct-to-consumer (DTC) models, disintermediation lets brands bypass wholesalers, retailers, and distributors entirely, which gives them tighter control over pricing, branding, customer relationships, and data.

It often leads to improved profit margins, faster delivery, and a more personalized shopping experience, but it also shifts every responsibility (fulfillment, support, marketing, cybersecurity) onto the brand.

Disintermediation is especially common in digital commerce, where modern ecommerce platforms, mobile apps, and social commerce channels make it easier than ever for brands to reach customers without an intermediary in between.

What does disintermediation mean for businesses?

Disintermediation gives brands full control over their marketing, pricing, distribution, and customer data. It is especially relevant for subscription and DTC brands that want to build strong customer relationships without relying on third-party platforms like Amazon or big-box retailers, which take a margin and own the customer relationship by default.

What is the disintermediation business model?

The disintermediation business model is a strategy where companies bypass traditional intermediaries (wholesalers, retailers, agents, marketplaces) and sell directly to customers through digital channels such as their own ecommerce site, a mobile app, or social platforms. The goal is to build a direct connection with consumers, reduce distribution costs, and gain more control over the customer experience and pricing. The opposite movement, where intermediaries reappear in the chain, is known as reintermediation.

Why is disintermediation growing in ecommerce?

• It offers higher profit margins by removing the markup taken at each layer of the supply chain.
• Brands get direct access to first-party customer data, which improves targeting, personalization, and lifetime value.
• It improves speed to market and shortens customer feedback loops.
• It enables more control over branding, packaging, and customer service.
• The subscription business model accelerates disintermediation by creating recurring direct relationships, where the brand owns the renewal, the customer data, and the experience over time.

Disintermediation example:

A skincare company traditionally sold its products through beauty retailers. Now, it launches its own Shopify store and subscription program, shipping refills directly to customers on a recurring schedule. That is disintermediation in action: the retail middleman is gone, and the brand owns the order, the data, and the renewal. Brands like Warby Parker, Dollar Shave Club, and Casper followed the same playbook in eyewear, grooming, and mattresses.

Driftcharge Tip

Disintermediation is more than skipping the retailer. Once you sell direct, you are fully responsible for the customer journey, so plan for the operational load that used to sit with the middleman: fulfillment, support, returns, payment fraud, and ongoing customer acquisition. Invest in user experience, support infrastructure, and the channels that actually drive your direct demand before you scale the model.

Ganesh Pawar

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Ganesh Pawar is the founder of Driftcharge, a subscription management app designed to help Shopify merchants streamline and scale their subscription businesses. With a deep focus on solving real-world pain points—like legacy account page support, flexible subscription options, and advanced analytics—Ganesh is passionate about building tools that drive growth and retention.