What is Disintermediation on a C2C Marketplace?
How Startup Founders Can Prevent It On Their Marketplaces
There is a massive, fundamental shift occurring in how commerce is being conducted today and this shift has not only affected consumers but also businesses.
With the advent of technology and internet-based services, there has been a disruption in the traditional model of doing business.
For years, traditional business models have revolved around businesses having to deal with multiple intermediaries and this made doing business very complicated.
This created several problems such as high cost of doing business for companies, issues with customers having to go through multiple steps to complete a transaction, poor customer experience due to complicated procedures and more.
The disintermediation of transactions in the traditional model of doing business has brought about a huge transformation which has changed the way we think about doing business today.
This change in thinking about how commerce should be conducted has not only affected consumers but also businesses.
Disintermediation on C2C platforms:
Disintermediation on C2C platforms can be defined as eliminating any middlemen or intermediary when conducting transactions on an online platform such as Shopify or Etsy.
This allows for direct interaction between the two parties involved in a transaction without any middlemen interfering with it and making it more complex than it needs to be.
Disintermediation is achieved by cutting out middlemen like banks or payment processors and having direct interaction between two parties involved in a transaction without any third party interfering with it and making it more complex than it needs to be.
Examples of disintermediation on C2C platforms:
Shopify Example:
Let’s take an example of a small-scale business owner who wants to sell their products online.
Traditionally, they would have to deal with a merchant account provider, which would enable them to accept payments online.
However, in the case of Shopify, this merchant account provider is removed and instead the business owner can use the Shopify payment gateway which eliminates the need for any third party to interfere with the transaction.
Etsy Example:
Let’s take another example of a small-scale business owner who wants to sell their products online.
Traditionally, they would have to deal with a merchant account provider, which would enable them to accept payments online.
However, in the case of Etsy, this merchant account provider is removed and instead the business owner can use Etsy Payments which eliminates the need for any third party to interfere with the transaction.
Disintermediation on C2C platforms has helped businesses save money by eliminating middlemen like banks or payment processors who make doing business complicated and expensive.
It has also helped businesses improve their customer experience by eliminating any middlemen who make it more complex than it needs to be.
Here are some ways to prevent disintermediation:
By keeping your fees low:
You can keep your fees low by doing things like offering free shipping and fast delivery, reducing product prices and more.
This will help you to retain customers by offering them better value than the competition.
By having an easy-to-use platform:
You can make your platform easy to use by having a great user interface, user experience, easy to use features and more.
This will help you to retain customers by making it easier for them to do business with you.
By having good customer service:
You can have good customer service by making sure that your customer support is always available and that they respond quickly and efficiently.
This will help you to retain customers who may otherwise switch to a competitor because of bad customer service.
Regards,
Alexander
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.
