1. Industry
Send to a Friend via Email

Your suggestion is on its way!

An email with a link to:

http://wholesalers.about.com/b/2010/10/21/manufacturers-selling-products-directly-to-consumers.htm

was emailed to:

Thanks for sharing About.com with others!

Manufacturers Selling Directly to Consumers

By October 21, 2010

Follow me on:

Manufacturers are increasingly selling products directly to consumers. Understandably, this is causing tremendous concern amongst wholesalers and retailers. Up until recently, Manufacturers would never compete with their customers, but the internet has changed everything!

According to a recent article in the Financial Times, "Procter & Gamble has started to sell brands direct to US consumers online for the first time, in a sign of how digital commerce is shaking up relations between retailers and their suppliers." In other words, Manufacturers are aiming to take retailers' margin for themselves! And this is just the beginning. There are now many examples of Manufacturer's competing in the direct-to-consumer space. And this trend is continuing to expand at a rapid pace.

Why is this happening now? Manufacturers are realizing that they do not necessarily need retailers to validate them any longer. With the success of the internet, Manufacturers finally get a chance to sell direct to consumers without having to open expensive retail stores. This is a huge difference from years past. Manufacturers now have the ability to build relationships and sell products online at deeply discounted prices to consumers.

On a positive note, one of the main reasons that Manufacturers haven't jumped into the direct-to-consumer space, is that they still realize the importance of not undercutting their existing customers ie wholesalers and retailers. They understand that there is a fine line between trying to generate more revenue for their business and not hurting their existing relationships. Therefore, manufacturers are starting to sell products online, but only at MSRP prices.

How long before all manufacturers go direct-to-consumers? Well, there is no clear answer yet, but over the next decade, Manufacturers will increasingly sell products directly to consumers. Either way, let's hope that this trend does not happen any time soon!

Comments

October 26, 2010 at 5:29 pm
(1) James says:

Karen,

Thanks for the article. I too have found that many of my suppliers are starting to compete with me online. I operate a store and yes they are selling the products at MSRP, but what happens when they get greedy and start under cutting their customers. Well, I hope that many manufacturers that are domestic or overseas, realize that their wholesalers and retailers are important to them. Not everyone likes to buy online and with large overhead for a store, so we need all the business we can get. I enjoyed your article.

Sincerely,
James

October 28, 2010 at 4:18 am
(2) Karen says:

Thanks James! I really appreciate the feedback :) .

December 28, 2010 at 6:31 pm
(3) Ashley says:

Check out Shopatron – they help 850 manufacturers sell ‘direct’ to consumer but in a way that wont compete with any of their retail partners! Polaroid, Spy Optics, Mizuno, Melissa & Doug all use them for their eCommerce platforms!

January 19, 2011 at 8:15 pm
(4) Steve says:

As a small Manufacturer in business for 60 years
we have suffered a 90% reduction in support from retailers due to the Chinese undercutting of prices.
Essentially, the retailers have “cut out” the manufacturers by buying cheap copies of great American products made in China.
The internet has offered manufacturers an opportunity
to sell direct to the public at the wholesale price and “cut out” the middleman retailers. Whats good for the goose is good for the gander and its all good for the consumer. Our sales have increased 500% since we opened our website 2 years ago and theres no end in sight. I think the future of manufacturing in America will be a good one thanks to the internet.

November 19, 2011 at 8:35 am
(5) heiceadsikele says:

An additional benefit if you intent to to check out a ugg boots sale is that often these boots are literally that cozy that you simply don’t actually need to wear any leggings or socks to actually feel comfortable and comfortable inside them which, in my personal opinion, basically is very cool.

The wool that is inside the ugg boots enables you to maintain your natural ugg boots for girls body’s temperature and also give the skin to inhale and exhale that is a key element to your typical wellbeing if you want simply to walk all-around over and over again in a while.

It became tough to uncover just about any right ugg boots sale vendors quite a while back also to receive the correct sizing you needed to count solely on ordering these boots on the internet being transported to you right from miles away. All that have since changed dramatically simply because ugg boots have become a fashion trend and will easily be purchased practically wherever worldwide.

uggs cheap are usually worn on both winter season and also summer season It turned out a significant issue a couple of years back regarding the authenticity on the ugg boots sale simply because there are lots of replica and fake ugg boots on the market from numerous distributors to generate a income out of it.

Leave a Comment


Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>

©2014 About.com. All rights reserved.