What is Disintermediation?

Let’s talk about how you get your product into people’s hands. There’s the traditional way. You sell through a big retailer. They have the network, the reach, the distribution.

If you make sunglasses, for instance, that might mean going through an optical chain or partnering with optometrists’ offices so your frames are right there when someone needs them.

This method works. Your product gets seen. It gets sold nationwide. But there’s a trade-off. Everyone in the middle takes a cut. Plus, you, the maker, stay one step removed from the people actually wearing what you’ve created.

Then there’s the other way. You skip the retail chains entirely and sell directly. No middleman. No extra markup. This is called disintermediation.

This guide will teach you everything you need to know about disintermediation, so you can decide if it’s the route you want to take as a retail business owner.

What is disintermediation?

In order to understand if this method is truly the best business model for your business, you first need to really understand what is disintermediation in retail.

Definition & origins

The term "disintermediation" refers to removing the layers between you and the people buying your product.

It’s a long word for a simple idea: Cutting out the middleman. That could mean skipping wholesalers, distributors, or retailers and selling straight to your customers instead.

When you do this, you get two big wins:

1. You control your brand story because you’re talking directly to the people buying from you using direct channels.
2. You own your customer data. You’re collecting it yourself via the customer interactions you're having via direct relationships. So you don't have to rely on someone else to hand it over.

The internet made disintermediation possible. Selling direct-to-consumer used to be a huge logistical challenge. But now, with third-party logistics companies and modern shipping infrastructure, even a small business can send products directly to a buyer’s doorstep.

Why disintermediation matters

Disintermediation puts you (the retail business owner) in the driver’s seat. It means more control over the sales process, direct relationships with potential customers, and lower prices by cutting distribution costs and shipping costs.

By using direct channels, you'll be able to interact directly with individual consumers, reduce costs, and improve delivery speed through better delivery services.

Whether in retail chains like grocery stores, the finance industry, or the real estate industry, eliminating intermediaries helps cut costs, save money, and create a more cost-effective business model. 

Types & real-world examples

It’s one thing to understand what the term means, but it’s another to see how it works in the real world. Let’s see this method in action.

Finance industry

In the finance industry, disintermediation means removing intermediaries like brokers and banks so people can invest directly.

You don’t have to pay extra fees or wait for someone else to handle your transactions. Instead, you can buy stocks, move your money, and manage your investments yourself.

For example, lending platforms like Epos Now Capital provide flexible business finance directly to small and medium-sized enterprises. This cuts out banks because lenders can apply through their POS provider, making funding faster, simpler, and with lower prices attached.

Another example is stock trading apps. Instead of calling a broker or going through a bank, investors use these apps to buy and sell stocks on their own. This cuts commission fees and gives investors immediate control over their trades.

Retail & eCommerce

In retail and e-commerce, disintermediation often means selling products straight to customers instead of going through retail stores.

Apple and Tesla are great examples of this. They use direct channels (Apple with its own stores and website, Tesla with its showrooms and online orders). This way, they interact directly with customers, control the sales process, and cut distribution costs.

Distribution & supply chains

Here, disintermediation means the maker sells straight to the customer without wholesalers or distributors.

A great example is Dollar Shave Club. Instead of putting razors on store shelves, they sell subscriptions directly to customers. The products ship straight from the manufacturer or fulfillment center right to the buyer’s door.

This cuts out extra steps, which means lower costs and shipping fees. Because there are fewer hands in the supply chain, delivery is faster and the process is simpler overall.

Plus, Dollar Shave Club gets to connect directly with customers. They control the entire experience from the purchasing process to delivery and speaking to customers directly. This direct relationship helps build loyalty and gives the company more control over how things run.

Benefits of disintermediation

Here's why disintermediation can be seen as a great method you could use at your retail business:

1. Reduced costs and prices: By cutting out wholesalers and retailers, brands save money on commissions, markups, distribution fees, essentially the overall cost. In fact, direct-to-consumer (D2C) e-commerce sales in the US hit $213 billion in 2024, mostly because of these cost savings.
2. Greater control over customer relationships: Selling directly lets brands interact with customers face-to-face (or screen-to-screen). This direct connection helps businesses understand their customers better, improve service, and build loyalty. Allowing consumers to become your biggest fans.
3. Faster delivery and higher profit margins: Shorter supply chains mean products arrive quicker. Think about it. Without intermediaries, businesses can be much more agile. They'll be able to quickly change strategies, launch products, or go into new markets without having to talk to and coordinate with lots of different parties. Supply pros say faster delivery can bump up sales by nearly half (47%). Since you’re skipping all those extra hands, brands get to keep more of the cash within these kinds of business models.

Challenges and trade-offs

Disintermediation can save you money and get you closer to your customers, but it also comes with some bumps you need to be ready for. Here’s the lowdown on common problems and easy ways to handle them.

Challenge 1: Building direct sales channels

Setting up your own shop (online or otherwise) takes some serious upfront effort and cash. You need a good website, slick checkout, solid shipping, and people to help customers.

• Pick user-friendly e-commerce platforms that make setup easy.
• Use marketplaces like Etsy to get your stuff out there quickly while you build your own site.
• launch a simple online store first and add features as you grow (don’t try to build the next Amazon)
• Most people shop on their phones, so your site better work flawlessly on them!

Challenge 2: Logistics and delivery

Sorting out how to get your products to customers yourself can be tough. Managing stock, shipping, returns, and even international delivery takes know-how.

• Team up with third-party logistics (3PL) companies who handle packing, shipping, and returns.
• Invest in solid inventory management software via a modern POS system so you know exactly what’s in stock, what’s coming, and what’s sold out.
• Use delivery tracking tools and keep customers in the loop.
• If you’re doing international sales, start small and learn the rules before going global.

Challenge 3: Marketing and getting new customers

Going direct means you’re also in charge of finding and winning over customers, which can be expensive in a busy online world.

• Create content that actually helps or entertains your audience. Things like blogs, videos, Instagram stories, whatever fits your vibe.
• Think about in-store retail marketing ideas you can use.
• Use SEO to get organic traffic so you don’t have to throw cash at ads all the time.
• Use social media ads but start with small budgets, test what works, then scale.
• Use email marketing to keep customers coming back without spending a ton.
• Try referral programs that let your happy customers do the marketing for you.

Challenge 4: Customer service

Without middlemen, you handle all the customer questions and problems — which can be a big job, especially if you don’t have a big team.

• Get a good CRM (Customer Relationship Management) tool to keep track of every interaction and follow-up.
• Train your team on quick, friendly, and helpful customer service. Tone matters!
• Use AI-automated chatbots for basic questions so real people can focus on the more in-depth questions.
• Make returns easy and clear because frustrated customers talk, and not in a good way.

Challenge 5: Running a more complex business

Doing everything yourself can stretch your team too thin and hurt your product quality or service.

• Automate the long-taking manual tasks like order confirmations, shipping updates, and FAQs.
• Use project management tools (Trello, Asana, whatever you like) to keep everyone on the same page.
• Outsource stuff you don’t want to do or don’t have skills for. You can use websites like Fiverr or Upwork to find marketing, logistics and graphic design freelancers.
• Hire people with the skills you lack or invest in training your team to level up.

Challenge 6: Competing with big players

Big brands and stores have tons of reach and customers already. Losing those channels can make it harder to get noticed.

• Focus on what makes YOU different. Is it your story? Your quality? Your vibe?
• Build a community around your brand. Reply to comments, share behind-the-scenes, celebrate your customers.
• Use influencer marketing to find micro-influencers who really get your product and audience.
• Create retail loyalty programs so customers keep coming back. Everyone loves perks!
• Collab with other small brands to cross-promote and grow together.

Check out our full guide on retail problems and solutions for more handy tips.

How to implement disintermediation successfully

If you've gotten to this section and still think disintermediation is for you, here are our top tips to get it right:

Build strong direct sales channels

The first step to disintermediation is making sure customers can buy from you directly, and that means setting up your own sales channels.

Start with a simple, easy-to-use website or online store. Use platforms like Epos Now Online if you don’t have web design experience. It comes with ready-made templates and step-by-step guides to help you set up product pages, shopping carts, and payment options.

Make sure your site works well on phones and tablets, too, because many customers shop on these devices. In fact, at least 79% of smartphone users have made a purchase online using their mobile device in the last six months. Test your site yourself and ask friends or family to try it out to spot any issues.

If you want to sell in person, think about opening your own physical store or a pop-up shop. This'll give customers a chance to see and try products before buying.

You can also use social media platforms like Instagram and Facebook to sell directly, also. These have built-in shopping features to make buying easy for your followers.

Remember, the key is to keep your sales channels simple and user-friendly. The easier it is to buy from you, the more likely customers will do so (again and again).

Use third-party logistics effectively

Once you’ve set up your direct sales channels, you need a reliable way to get your products to customers quickly and safely.

A 3PL company handles storage, packing, and shipping for you. Instead of trying to do everything yourself, you partner with experts who specialize in getting products out the door fast.

When researching 3PL companies in your area, be sure to:

• Look for ones with good reviews
• Make sure they have transparent pricing models
• See if they have experience handling products like yours.
• Ask about delivery speed, shipping options, and how they handle returns or damaged goods.

Integrate their systems with your online store so orders flow automatically from your website to the 3PL team. This cuts down on errors and speeds up the whole process.

Offer superior customer experience

Selling directly means you’re the face of your brand and that puts customer experience front and center. You want every customer to feel valued and confident buying from you.

Here are some winning ways to win at your customer interactions:

• Make it super easy for customers to reach you by offering email, chat, or phone support. Quick, friendly replies go a long way.
• Be clear and fair with returns and refunds. Customers want to know they’re protected.
• Give detailed product info and FAQs on your site to answer questions before they come up.
• Send order updates and tracking info so customers know exactly when their purchase will arrive.
• Ask for feedback and listen to what your customers say, then use it to improve.
• Don’t forget the power of upselling. Suggesting complementary products or upgrades during checkout or follow-ups shows you know your customers. 

Remember, great service builds trust, keeps customers coming back, and turns them into your biggest fans.

Personalize through data insights

When you sell directly, you get valuable info about your customers. Things like:

• What your customers buy
• When they like to shop
• How often they buy your products

You can then use this data to make their experience personal and super relevant.

Plus, tracking KPIs in retail helps you see how your business is doing and spot opportunities to improve. These numbers show you what’s working and what needs tweaking.

Now, this used to have to be done manually, but luckily with retail POS systems and CRM systems and e-commerce platforms, much of this data collection and analysis happens automatically.

Once these systems collect all the data, you'll be able to spot trends like:

• Which products are most popular
• When sales peak during the day, week, or season
• Which customers buy regularly and what they prefer

With these insights, you can tailor marketing campaigns, create special offers, and stock up on the right products at the right time.

It’s all about making your customers feel understood and valued.

Final Thoughts

That’s it from us. We hope you now have a clear understanding of what disintermediation is and why it matters for your retail business.

Cutting out intermediaries helps you take control. Control over how you sell, how you talk to customers, and how you grow your brand.

Of course, that control means having to be responsible for a lot of elements within your company.

So, the question is: are you ready to take on those challenges and reap the rewards?

Disintermediation isn’t for everyone, but if you’re willing to put in the work, it can give your business more control, better customer relationships, and improved profits.

Keep learning, plan carefully, and use the right tools to make the most of this strategy.

Your customers (and your bottom line) will thank you.