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disintermediation

 or ‘cutting out the middleman’. For example, a music 

company today can distribute digital tracks straight to sites such as iTunes and Napster, a 

major change to their channel strategy which has led to the closure of many music stores. 

Bands can even bypass retailers and sell direct; for example, in 2008 Radiohead released their 

In Rainbows album direct from their site, allowing purchasers to name their own price!

Electronic 

marketplace

A virtual marketplace 

such as the Internet in 

which no direct contact 

occurs between buyers 

and sellers.

Disintermediation

The removal of 

intermediaries such 

as distributors or 

brokers that formerly 

linked a company to its 

customers.

Location of trading in the marketplace

Figure 2.6

B2B and B2C interactions between an organisation, its suppliers and its 

customers

Key

Suppliers

Business-to-business (B2B) transactions

Business-to-consumer (B2C) transactions

Organisation

Intermediaries

Channel

partners

(organisation)

Channel