Brand manufacturers now selling & shipping straight to the customer
For many years, the retailer was the middleman who connected brand manufacturers to customers. The merchant bought products straight from manufacturers (often for a discount price at bulk) and then sold them straight to customers for slim profit margins.
Recently, however, manufacturers have begun realizing this approach does not always favor them. For example, they never get to accurately determine who buys their products – this data goes into the hands of retailers, which often provide this information to production companies for a price. From the customer’s side, buying straight from the brand manufacturer can also be advantageous, as they get lower prices since brand manufacturers are cutting out the middleman.
Granted, the age-old retail system has its own set of advantages as well. For instance, many people are more familiar with retail brands than the actual manufacturer – they know which products they love, but not necessarily who makes them. This can help some lesser known brands bridge the gap and gain the necessary exposure to establish themselves.
Selling products straight to the customer
Brand manufacturers are now launching their own eCommerce operations. Now it is not uncommon to find a brand who is the manufacturer/supplier, drop shipper, and direct seller of their products. This allows them to engage loyal retail customers directly and helps them learn more about their most dedicated buyers.
Additionally, more people are looking to buy straight from product manufacturers. One study from Capgemini found that two-thirds of respondents across the globe are increasingly looking to order items directly from brand manufacturers over the next three years. On top of that, they are also using mobile apps from brand manufacturers to assist them in making these purchases.
For brand manufacturers, this behavior means they need to stop looking at themselves strictly as producers and more as merchants. To some degree, they will be competing with the very same merchants they work with to sell products. While they want to maintain healthy relationships with these companies, they do need to ensure they are offering loyal customers a shopping experience that is every bit as satisfactory.
While it may sound easy on paper, Multichannel Merchant pointed out offering a direct-to-customer service is no easy task.
Using the right tools for the job
Perhaps one of the first things brand manufacturers must do is implement all the tools and solutions needed to create an eCommerce shopping experience. If these companies have never sold directly to consumers, they may need to start from scratch and integrate all the appropriate customer management, order fulfillment and inventory management solutions needed to power their online sites.