Definition - What does Reintermediation mean?

Reintermediation is the reintroduction of an intermediary between a goods producer and consumers. While disintermediation removes elements form the supply chain, reintermediation adds new elements to the supply chain. Reintermediation occurs due to many issues associated with the e-commerce disintermediation model, mostly involving issues with the direct-to-consumer model.

Techopedia explains Reintermediation

E-commerce has often been seen as a tool of disintermediation as it brings significant cuts in operating costs in many instances. However, the massive customer service requirements, high shipping expenses for small orders and challenges posed by the disintermediated retailers and supply channel partners which happens in some cases helped spur reintermediation. In a disintermediated business model, the producer needs to do all the activities associated with presales and post-sales for the consumers. Huge resources are often required to accomplish all these activities. In a reintermediation concept, the supply chain middlemen acts as the sales people for the producers and leverages their resources and capabilities to handle these activities. These allow the producer to focus only on the goods and thus produce the best final end product.

Similar to disintermediation, reintermediation can bring positive or negative impacts to the business, often depending on the type of industry the intermediaries operate in. Reintermediation has a significant impact on certain organizations such as travel agencies, which thrive as suppliers of travel services. Intermediaries traditionally provide infrastructure for the whole sales life cycle. However, with the introduction of e-commerce, many tasks done by intermediaries can now be automated. In cases where there is less complexity, manufacturers can make use of the internet to directly sell to consumers and provide support. However, in some cases, intermediaries can provide more value-added services and assistance, which leads to reintermediation.

Share this:

Connect with us

Email Newsletter

Join thousands of others with our weekly newsletter

The 4th Era of IT Infrastructure: Superconverged Systems
The 4th Era of IT Infrastructure: Superconverged Systems:
Learn the benefits and limitations of the 3 generations of IT infrastructure – siloed, converged and hyperconverged – and discover how the 4th...
Approaches and Benefits of Network Virtualization
Approaches and Benefits of Network Virtualization:
Businesses today aspire to achieve a software-defined datacenter (SDDC) to enhance business agility and reduce operational complexity. However, the...
Free E-Book: Public Cloud Guide
Free E-Book: Public Cloud Guide:
This white paper is for leaders of Operations, Engineering, or Infrastructure teams who are creating or executing an IT roadmap.
Free Tool: Virtual Health Monitor
Free Tool: Virtual Health Monitor:
Virtual Health Monitor is a free virtualization monitoring and reporting tool for VMware, Hyper-V, RHEV, and XenServer environments.
Free 30 Day Trial – Turbonomic
Free 30 Day Trial – Turbonomic:
Turbonomic delivers an autonomic platform where virtual and cloud environments self-manage in real-time to assure application performance.