Ecommerce for manufacturing companies has long been a challenge. The logistical challenges posed by remote production and the high cost of inventory have kept the more risk-averse companies at arm’s length. But with the right solutions, ecommerce isn’t just a way to increase visibility and sales volume—it’s a tool that can help you cut costs, improve margins, tap into new markets, and streamline processes. For manufacturing companies seeking to reach new markets and eliminate middlemen, ecommerce is a powerful tool for your strategic sales approach. But, keep in mind that ecommerce for manufacturing isn't an 'either/or' prospect or a zero-sum game. Rather, it is an opportunity to expand your go-to-market (GTM) strategy and sales channels, and make your brand more robust, with a greater impact on the market.
Ecommerce is the practice of running a business using online platforms to facilitate sales. It’s often used as a catch-all term that can include online sales, online marketing, and online inventory management. Ecommerce services can be provided by third-party vendors (online marketplaces such as Amazon, Etsy, or Alibaba), or channel partners. These vendors might use their own ecommerce solutions, or work on more robust industry-standard systems like Salesforce Commerce Cloud. All told, digital commerce is about letting vendors sell online, and providing customer experiences that entice repeat purchases.
Ecommerce for Manufacturing brings several benefits to the table. These include:
Increase profitability – The manufacturing industry is pressed to continually improve the effectiveness of their sales teams, and cater to both B2C consumers and B2B buyers. Going online means catering to the growing desires of customers to interact directly with the brand, while also cutting out the middle-man in many cases. Although distributors and wholesalers provide important business value for many industries, D2C and direct B2B online sales can help manufacturers retain full margins for their products.
To paint a balanced picture of ecommerce for manufacturing companies, you should also consider the challenges. Doing so means going into the online world with a sound mindset, and a strategy to overcome the challenges. Be aware of the following issues:
Improving sales – While ecommerce can help manufacturers reach new customers, the challenge is sticking with them after the sale. Retail stores can offer personalized service and advice to customers. However, even after the sale, customers can use these online outlets for future research on the manufacturers and brands.
In this article, we largely addressed the importance of ecommerce for manufacturing from a pros and cons perspective. It is also useful to consider the use cases for online sales in the industry. Often, we default to thinking about manufacturing as a B2B (business to business) endeavor. But there are three use cases important to the business. These three use cases are strategies that brands and manufacturers need to consider when thinking through their approach and direction in ecommerce.
Digital transformation for brands breaks down into the three discrete cases:
B2B (business to business)
For each case, the different systems and underlying technologies you need to run them effectively make a difference. We’ll address each case in future posts (stay tuned).
Ecommerce is a growing sales channel for retailers, resellers, and channel partners in the supply chain ecosystem—including manufacturers and brands. In fact, ecommerce for manufacturing can be a great addition and expansion to a company’s strategy. These days, it’s easier than ever to create a store that sells products online. But before you dive in, you need to know what you’re getting into and choose a strategic direction. The benefits of ecommerce are great. When chosen wisely, it can revolutionize, and revitalize your entire business.
If you are considering taking your manufacturing business in the direction of ecommerce, consider the following two technology options. Go Direct to Consumer (D2C) fast with a Quick Start D2C solution. Alternatively, if B2B ecommerce is your direction of choice, consider either a Quick Start B2B option or a fully customized B2B Manufacturing Accelerator solution. Either way, connect with us for a quick discussion of which solution best suits your business needs.
Charles brings more than 20 years of experience in marketing, sales, product development, and management. With depth and breadth in varied markets, he drives the right go-to-market and demand generation strategies for OSF’s core products. A lifelong learner, he graduated from the University of Waterloo with degrees in management, business economics, and engineering. Charles also holds several certifications in leadership and marketing.