The Act guarantees establishment of regulated markets or ‘mandis’, wherein farmers could sell their produce at a reasonable price and in a transparent manner. 1221 Words 5 Pages. Using direct distribution eliminates the expense of using the middleman. One disadvantage of disintermediation for the consumer is that it might not save her that much money, but it does eliminate jobs as small local retailers go out of business because they can't compete with the prices offered by discounters and wholesalers. More be the middleman , the longer will be the chain between manufacturers and Consumers. In the case study, the focal point is the company USTech which has been outsourcing its manufacturing to a Taiwanese company Taisource.Over the period of time, as the relationship between the two companies has developed, Taisource has achieved competency in its field pertaining manufacturing products of high quality as … Eliminating the middlemen means creating more work for yourself. Business owners might think that cutting out the middleman will benefit the company by reducing costs, but it’s not that simple. An example of middlemen working in a channel of distribution is travel agencies selling hotel rooms.The hotels will sell a certain number of rooms themselves and sell the rest of the rooms to a middleman. However, to understand Munger’s arguments we must first define transactions costs. Transactions costs are compromised of the three … 2. Business decentralization is a natural process for globally oriented firms aiming for the global market. Advantage: Eliminates Intermediary Expenses. Any middleman between manufacturers and Consumers creates a distance between these two. That means you’re doing everything from taking orders to fulfilling them, managing marketing, and performing all customer service. Thriving businesses require some basic operations and services to continue the upward trek to profitability. The main reason that many will argue that middlemen should be elimination from the channel of distribution is related to the extra costs involved in employing them. Not only must you pay a commission when you partner with an intermediary, you also have service costs. The Government of India introduced the Agricultural Produce Market Committee (APMC) Act in 1963- with a linchpin focus on eliminating the exploitation of farmers by middlemen. Disintermediation requires you to take on all the work that intermediaries would normally perform. The Advantages of Eliminating the Middleman. Decentralized business has certain characteristics like delegating decisions, greater… It can increase costs. Case Study - Eliminate the Middleman Problem Identification. Another disadvantage for the consumer is the lack of personal help in making purchasing decisions. The result is that the manufacturers are not in a position to know the needs, wants and grievances of consumers, therefore, efforts should be made to cut sort this chain. Disadvantages Of The Middleman Economy. Michael Munger, the director of the Philosophy, Politics, and Economics at Duke University, constructs two fundamental arguments discussing the Middleman Economy and the Sharing Economy.