Disintermediation and the Fight for the Front Door

The Kettle

Picture a woman in Parramatta whose kettle has just died. She doesn't open a browser. She says to her phone, "Replace the kettle." That's the whole instruction.

The agent that hears her already knows a great deal. It knows the last kettle lasted three years and the one before it lasted eleven. It knows she hates the ones with the plastic spout, that she has a budget in her head she has never said out loud, and that she is home on Friday and not on Thursday. It knows she once returned a toaster to a company that made her print a label, and it has quietly marked that company down. It searches a dozen merchants, compares, rejects the cheap one with the suspicious reviews, and buys a stainless one from a seller she has never heard of. A parcel turns up on Friday.

At no point did she visit Amazon. Amazon may well have packed and shipped the thing. She never saw its storefront, never scrolled its results, never clicked a sponsored listing. Amazon did the work and somebody else got the customer.

Now here is the part that should bother you. Amazon is the company that was supposed to be the end of the middleman. It spent twenty years eating shopkeepers, wholesalers and booksellers on the promise that the customer could go straight to the source. And here comes something that stands between Amazon and its own customer.

The pattern is older than Amazon, older than the internet, and older than the word for it. I'll argue that every wave of disintermediation ever promised has ended the same way. The middleman didn't die. He moved house.

(This article is a powerful illustration of a similar idea - and well worth the read if you have ever wondered what role luck plays.)

What the Word Actually Means

People use "disintermediation" as though it means one thing. It means at least four, and confusing them is how clever people talk themselves into stupid predictions.

The first is removal: the producer sells directly to the buyer and the intermediary is simply gone. This is the version everybody imagines and the one that almost never happens in full.

The second is unbundling: the intermediary's job is split into pieces and handed to several new actors. The old travel agent searched, advised, booked, held your money and sorted out the mess when the flight was cancelled. Those functions didn't vanish. They scattered.

The third is reintermediation: a new gatekeeper arrives and turns out to be more powerful than the old one.

The fourth is the one that matters for this essay. I'll call it displacing the interface: the old intermediary still fulfils the transaction, but it no longer owns discovery, choice or loyalty. It becomes plumbing.

Here is the analytical point most commentary skips. An intermediary is not just friction with a salary. It does real work: search, trust, aggregation, financing, distribution, standards, insurance, dispute resolution, and the very scarce business of getting a buyer's attention. Remove the intermediary and all of that work still has to be done by somebody.

I call this the conservation of intermediation. The work doesn't disappear. It changes address. The only open question is who now lives at the new address and what they charge for the privilege.

Banks Did It First

The word did not begin with the internet. It began with money.

As I understand it, from the 1930s US regulation capped the interest banks and savings institutions could pay on deposits (the rule was called Regulation Q). That was fine while market rates sat below the cap. When rates climbed past it in the late 1960s and 1970s, savers noticed they could earn more by pulling their money out of the bank and putting it into Treasury bills, and then into money market funds, which I think first appeared in the early 1970s. Money went around the bank. That was disintermediation, and bankers used the word as a swear word.

Look at what happened next. Banks did not die. They invented new products, lobbied for the caps to be lifted, and bought or built the very funds that were draining them. The money market fund became a profitable intermediary in its own right, with fees, a brand, and a customer who now trusted a fund manager instead of a teller. The saver cut out one middleman and acquired another.

Hold on to that template, because it never changes. A rule, price or structure makes the incumbent intermediary too constraining. Customers route around it. The routing itself becomes a business. The business grows fees, discretion and a regulatory department.

The word, notice, never meant "technology makes middlemen vanish". It meant capital moving around a regulated gatekeeper, and the gatekeeper adapting. The tech-utopian version came later and left out the ending.

The Catalogue and the Counter

The impulse to cut out the middleman is much older than the word. Montgomery Ward put out a catalogue in the early 1870s, and by the 1890s Sears, Roebuck was mailing a book the size of a brick to farm families who had one general store within a day's ride. The pitch was pure disintermediation: buy from the source and keep what the storekeeper would have pocketed. The local retailer screamed about it, and I'm told that in some towns the catalogues were burned in public.

Singer did the opposite and arrived at the same place. From the middle of the nineteenth century it built its own shops and sold sewing machines on instalment credit, skipping the independent dealer altogether. That sounds like a clean win until you look at what Singer had to build to do it: shopfronts, salesmen, a repossession department, a credit book and a repair network. It had not removed the intermediary. It had hired one, then put him on the payroll and called him a division.

This is the counterpoint every direct-to-consumer evangelist forgets. When a manufacturer cuts out the distributor, it inherits the distributor's job. Inventory risk, customer service, returns, freight, marketing and credit all land on its desk. Plenty of manufacturers have gone direct, discovered how much of the middleman's margin was payment for real work, and quietly gone back to wholesale. (Hello Nike!)

The middleman had not vanished. His work had changed address, and the new tenant was often worse at it.

The Web Promised Everyone a Shopfront

Then came the 1990s and the greatest disintermediation fantasy in history. The web, we were told - and it is a message I repeated myself on the speaking circuit - would let every producer talk directly to every customer. Distance, shelf space and gatekeepers would be abolished.

So, how did that go?

Travel agents. In February 1995 Delta capped the commission it paid agents at $50 on a domestic round trip, down from a flat 10 per cent, and the other big US carriers followed within weeks. Expedia launched the following year. Agents did get hammered. And then Expedia, Booking and the metasearch sites turned up as the new agents, taking a cut of nearly every hotel room and airline seat, and hotels that wanted to escape them found their best-ranked listings were the ones paying the highest commission. The hotelier traded a travel agent for a faceless platform.

Newspapers. Classified advertising used to subsidise the whole business of reporting. Craigslist took it away for next to nothing. Nobody thinks Craigslist built a utopia of direct buyer-seller contact. Google and Facebook ended up with the advertising money, and they are intermediaries on a scale no newspaper proprietor ever dreamed of.

Music. Napster, around 1999, showed that the labels were not needed to move music from artist to listener. Then people realised they still needed somebody to find the music, pay the artist, and make the thing legal and easy. Apple's iTunes Store, and later the streaming services, filled that gap and now collect a toll on a catalogue they did not make.

Brokers. Online trading cut commissions to near zero. The broker's job of routing orders, holding assets and absorbing the risk of a bad trade went somewhere else, and the "free" trade is paid for by selling the order flow. The middleman is still there. You just stopped being the one paying him directly.

Bloggers and publishers. I have been writing a blog since 2007, so I speak with some authority here. We were told that anyone could publish without an editor or a printing press. True. And then discovery turned out to be the whole game, and a handful of platforms decided who saw what.

Notice the same four-step arc each time. The web lowers the cost of reaching customers. The flood makes discovery nearly impossible. A new aggregator organises the flood and earns trust. And the aggregator becomes more powerful than the old gatekeeper, because it controls something the old gatekeeper never did: the starting point.

Amazon, the Great Reintermediator

Amazon is the hinge of this whole story, so look at it carefully.

It did disintermediate. Physical shelf space stopped being a constraint, so the long tail of books, parts and obscurities suddenly had a home. Local retailers lost the monopoly that geography once gave them. Price comparison got easy. Delivery, reviews, search and payment were fused into one frictionless experience, which is the part that made it a killer.

But Amazon did not make commerce direct. It made itself the most consequential intermediary between buyer and seller that the world has ever seen.

Think about what a seller on Amazon actually faces. Marketplace ranking is the new shelf, and the seller has no say over where it goes. Sponsored placement is the new toll road, and the toll rises every year (Amazon's advertising business brought in about US$68.6 billion in 2025, and it grew out of the seller's desperation to be seen). Fulfilment became infrastructure, and a seller who wants the good badge has to hand over the logistics. Reviews became the trust layer, and Amazon owns the rules. Access to the customer is conditional on Amazon's terms, on Amazon's data, and on Amazon's mood.

A seller on the platform is not a free merchant selling to a free customer. She is a tenant in a shopping centre from hell, where the landlord can see her sales figures, copy her bestsellers, and raise the rent through advertising fees. Plenty of merchants will tell you, if you buy them a drink, that the shopkeeper's life was not worse than this.

That is the reintermediation, and it worked precisely because Amazon sat at the entrance. Which brings us to the real question. It was never "who completes the checkout?" It is "who receives the customer's intent first?"

The Front Door Keeps Moving

Consider the history as a series of changes in where the buyer starts, and who profits from that starting point.

Every row looks like the end of the one above it, and every row is a new gatekeeper selling access to the same customer. The merchant at the bottom of the stack, and that my friend is YOU the retailer, are the only constant. They keep paying for the privilege of being found.

The pattern is that control moves upstream, toward whoever sees the desire before anyone else does. A shopkeeper sees you when you walk in. A search engine sees you when you type. A feed sees you when you scroll. An agent sees you when you merely think "I need a kettle", before you have formed a query at all.

What an Agent Changes

Every previous interface was oversold, but an agent really is different in kind.

A search engine answers a question. A marketplace organises a catalogue. A recommendation feed proposes things. All three wait for you to show up. A personal agent holds context over time and acts toward a goal you gave it. It can remember your preferences, reach across services, take a plain-English goal instead of a keyword, plan several steps, compare across merchants and marketplaces, keep working while you sleep, and, within limits you set, spend your money.

Three products show how fast the contest has started. Meta launched Muse in the US on 8 September 2026 as a free personal agent for multi-step tasks across email, calendars, payments, dining and shopping. Instinct, from the San Francisco startup Spear Street Technology, is an invite-only agent you reach by text message or phone call, with no app at all, which runs errands such as bookings, rides and subscription cancellations. And xAI's Grok Bot (launched in August) gives you a team of always-on bots, each with its own cloud computer, which hand work to each other. Whether any of them turns out to be the real thing is not the point. They are early moves in a contest over who gets to hold the buyer's delegated intent, and that is the contest that matters.

And the contest is already physical. On 20 September, twelve days after Muse launched, Amazon blocked it from shopping on Amazon.com. A company does not bother to lock the door against something it thinks is harmless.

Who Wins the Race to the Front Door

If you made me bet, I'd back them in the order Muse, then Grok Bot, then Instinct, though for different reasons and not really for the same customers.

Muse has the oldest advantage in the book, which is distribution. It lands free in front of a user base that already lives inside Facebook, Instagram and WhatsApp, and it was reportedly sitting at the top of Apple's US free-app chart within a fortnight. Nothing else on this list starts with billions of existing relationships, and the history above says the winner of an interface war is usually whoever is already in the customer's hand. Its weakness is trust and incentive. Meta earns its living from advertising, so the question of whose agent this is hangs over it from the first day, and Amazon's block shows how quickly a platform can shut a door in its face.

Instinct has the best answer to friction. There is no app, no dashboard and nothing to learn; you text it or call it like a person, and for the ordinary household errand that is very hard to beat (I believe friction is the single most underrated variable in consumer technology). But it is invite-only, it asks you to hand a startup your email, messages, location and payment details, and it is up against Apple and Google, who can turn the same behaviour into a built-in feature of the phone. A text-message interface is easy to copy. An operating system is not.

Grok Bot is playing a (slightly) different game. It's multi-agent:  you build a team of narrow specialists that pass work to each other, and you teach it your routines, which means more setup and a steeper climb for the casual buyer, and a much better fit for a small business owner with an inbox, a CRM and a pile of invoices. It is unlikely to win the kettle. It could win the back office, and in the long run that may be the more defensible position, because a business that has trained a team of bots on its own processes has switching costs that a consumer texting for a taxi will never have.

Why an Agent Could Dethrone the Storefront

Amazon holds four valuable positions in the buying process, and an agent can in principle take every one of them.

Discovery. "What should I buy?" used to start with Amazon's search bar. It could start with the agent.

Comparison. "Which option actually fits my constraints?" Amazon's ranking is built to maximise Amazon's revenue. An agent that works for the buyer can compare on the buyer's terms.

Loyalty. "Where do I habitually start?" Habit is the real moat. The agent breaks the habit by becoming the habit.

Interface. "Which service represents me in this transaction?" If the answer is the agent, then Amazon is a back-end.

The agent's advantage is not that it searches better. It is that it knows things. It knows what you bought and regretted, what you can afford this month, what you'd pay extra to get by Friday, whose birthday is coming, and which brands you refuse to touch on principle. No storefront will ever know you like that, because the storefront is built to serve every customer at once, and the agent is built to serve one.

So Amazon could remain a supplier, a fulfilment network, a marketplace and a merchant of record, and still lose the thing that made it Amazon, which was the place where the customer decided.

The Case Against Me

This is a pattern I see, but I might not be right. I have been wrong before - I think back in ’87? Anyway, I digress...

First, agents need clean data. Pricing, stock, delivery windows and return terms have to be reliable and machine-readable, and a good deal of retail data is neither. An agent that buys the wrong kettle once will not be forgiven.

Second, the incumbents can simply shut the door, and Amazon already has. The pop-up Muse users now see says that continued access by an unauthorised AI agent violates Amazon's Conditions of Use. Amazon says Meta never told it Muse was coming, that the agent doesn't identify itself when it browses, and that it appears to capture customer credentials. Meta's launch post says Muse has no visibility into passwords or payment methods. Amazon has also gone after agents from Perplexity, Google and OpenAI, while running its own shopping agent, Alexa for Shopping, behind the wall. The legal ground is less comfortable than it sounds, though. In August the Ninth Circuit, in Amazon's case against Perplexity, ruled that the user and not the AI company is the party accessing the computer under federal anti-hacking law. That does not settle whether Amazon can enforce its terms against agents, which is exactly the fight to watch.

Third, payments, fraud, permissions and liability are unresolved. When an agent buys the wrong thing on your behalf, who pays? Nobody has settled that, and the law has barely started.

Fourth, for the most part consumer buying is not logical. People choose on taste, mood, status and ambiguity. Half of what we buy is a statement about who we are, and an agent optimising for "best kettle" misses that.

Fifth, and the one I take most seriously: the agent provider may simply become the next advertising-funded gatekeeper. If the agent is free, someone else is paying for it, and that someone will want to be recommended.

Sixth, Amazon can build its own agent, buy one, or offer preferential access to partners. It owns the data, the logistics and the checkout. A company with that many cards does not need to win every hand.

All of this is true, and I can't dismiss any of it. The most it does is delay the outcome and change who profits. What it cannot do is cancel the underlying mechanism, which is that whoever stands closest to the buyer's intent collects the margin. Amazon built an empire on exactly that insight, and it would be strange if the lesson only ran in one direction.

Whose Agent Is It?

An agent is not on your side just because it speaks in the first person. The grammar of "I found you the best option" is a costume. Underneath it there is a business, and the business has an incentive.

So ask the questions you would ask of any human who handles your money. Does it maximise your welfare, or merchant commissions, or advertising revenue, or the provider's ecosystem? Can you inspect why it recommended a product? Can you set rules (no sponsored results, local shops first, repair before replace, no suppliers with a dodgy record)? Who owns the record of your preferences? And can you take your agent, with its memory and its habits, to another provider, or are you locked in?

That last question is the one that decides everything. The preference graph (the accumulated model of what you want and will pay for) is the most valuable commercial asset in this entire story, and at the moment it belongs to whoever hosts it. If you cannot move it, then the agent is not your representative. It is your landlord's representative, wearing your face.

As an aside, and backed by nothing more than a lifetime of watching how commercial incentives behave: I'd even argue that the agent market will be won by whoever makes switching easy, and lost by whoever tries to make it hard. Every dominant platform in history has done the opposite, and every one of them eventually attracted a regulator or a rival with a cheaper door. I wouldn't put my own money on any firm that thinks the lock-in will hold this time.

This is the same old libertarian question wearing fancy dress. A free person is one who can walk away from a bad arrangement. Property rights over your own preferences is the practical form of that freedom. A market in which you cannot take your data and leave is not a market. It's a company town.

Back to the Kettle

Go back to the woman in Parramatta. She has a new kettle and a good Friday, and she has no idea how many hands it passed through to get there. Amazon may have packed it. A third-party seller may have made the margin. And a piece of software she trusts made the only decision that mattered.

The future is not necessarily a world without Amazon. It may be a world where Amazon's logistics, selection and merchant network endure while the front door, the bit that made it powerful, becomes optional.

The history of disintermediation is not a story of middlemen disappearing. It is a story of power moving to whoever makes complexity feel simple. For a century that was the shopkeeper, then the catalogue, then the search bar, then the marketplace. In the age of agents it may be none of them. It may be the system you've entrusted to act for you.

And that system's loyalty, the one question nobody is asking loudly enough, is up for sale. You had better find out who is bidding.