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reintermediation

 is perhaps a more signifi‑

cant phenomenon resulting from  Internet‑  based communications. Figure 2.8 illustrates this 

concept. Figure 2.8(a) shows the traditional situation in which many sales were through 

brokers such as the Automobile Association (

www.theaa.co.uk

). With disintermediation 

(Figure 2.8(b)) there was the opportunity to sell direct, initially via call centres as with 

Direct Line (

www.directline.co.uk

) and then more recently by their transactional website. 

Purchasers of products still needed assistance in the selection of products and this led to the 

creation of new intermediaries, the process referred to as reintermediation (Figure 2.8(c)).

In the UK MoneySupermarket.com and Confused.com are examples of 

a new intermediary providing a service for people to find online insurance 

at a competitive price. Esurance.com and Insurance.com are US examples.

What are the implications of reintermediation for the e‑commerce 

manager? First, it is necessary to make sure that your company, as a sup‑

plier, is represented on the sites of relevant new intermediaries operat‑

ing within your chosen market sector. This implies the need to integrate 

databases containing price information with those of different interme‑

diaries. Forming partnerships or setting up sponsorship with some inter‑

mediaries can give better online visibility compared to competitors. Second, it is important 

to monitor the prices of other suppliers within this sector (possibly by using the intermediary 

website). Third, it may be appropriate to create your own intermediary; for example, DIY 

chain B& Q set up its own intermediary to help budding DIYers, but formerly positioned 

separately from its owners. Such tactics to counter or take advantage of reintermediation are 

sometimes known as