Farmers Markets
A farmers market that directly connects producers and consumers thus cutting out an array of businesses that are typically involved in buying, transporting, warehousing, distributing and selling food.Direct Sales
Firms that sell directly to consumers. For example, an airline that makes an effort with price promotions and easy to use booking on their website in order to cut out distributors such as travel agents and booking sites.Ecommerce
Websites and mobile apps that brands use to sell direct to consumer.Sale By Owner
Selling assets such as real estate without using agents who will take a significant commission.Direct-to-Consumer Brands
Brands that are only available via a direct purchase. For example, a subscription service that provides personal care items to customers that aren't available in stores.Luxury
Luxury brands that want to manage their entire customer experience such that they refuse to distribute through partners such as retailers.Response to Resellers
An entertainment company releases a much anticipated new video game console that is aggressively purchased by resellers at retail locations and sold online at a higher price. This creates problems for customers as the resellers are dramatically increasing prices but aren't really adding much value. The firm decides to start selling most of its stock online with a reservation system and a limit of one purchase per customer.Drawbacks
Middleman can add value and create efficiencies. For example, a retailer that provides a one-stop-shop where consumers can get everything they need for a week in one place. This could be very efficient for the consumer as compared to direct sales where they need to order from each different product company separately.Summary
Cutting out the middleman is a business model that reduces the number of intermediaries in the supply chain. This often involves producers selling directly to consumers in order to have a direct relationship and to make things more efficient.
| Overview: Cutting Out The Middleman | ||
Function | ||
Definition | A business model that bypasses intermediaries in a supply chain. | |
Value | Lower pricesAllows producers to directly represent their product, potentially creating incentives for higher quality. | |
Related Concepts | ||
