Amazon’s Biggest Asset: Disintermediation
Yes, that’s a big word. But it’s a very important one. Amazon is part of a wider Internet revolution that has been shaking up business models for well over a decade now.
Traditionally, businesses worked with a chain of intermediaries going from the manufacturer to the consumer. Each of those links in that chain took a cut of profits before passing the good along to the next link. Some products had only two or three links, others had a dozen or more.
The Internet changes that completely and makes it possible for most of those links in the chain to be cut out, shortening the chain and thus lowering costs (which either boosts profit or lowers the sales price – often both).
This is called ‘disintermediation’ by those in the know. Read the rest of this entry »
Tags: amazon, disintermediation
