Why Are Manufacturers Going to eCommerce?

Ecommerce has absolutely been the hot word of business publications this decade. I decided I should research it and find out why so many manufacturers were transitioning to ecommerce strategies and models.

So why are so many manufacturers going to ecommerce? Ecommerce provides many benefits for manufacturers that all ultimately increase revenue, productivity, and cut costs. Ecommerce does this by shortening the supply chain and allowing companies to more easily enter new markets.

Ecommerce initially gained traction in B2C retail sales but has since transitioned to have a greater market share in B2B transactions. In 2013, Forrester noted that B2B ecommerce would more than double B2C retail ecommerce: $559 billion to $252 billion. Business owners began to expect the same advantages (ease of service, access to multiple vendors, increased mobility)  they received as a customer, as an owner.

Owners often see ecommerce as a way to automate and integrate current marketing and solutions efforts which allows them to focus more energy on building relationships and long-term planning. A study by the Wall Street Journal and Deloitte found that manufacturers spend about 8% of their overall budget on marketing. Since financial budgets are similar to time budgets, an owner being able to automate and integrate 8% of his or her business is extremely significant.

What’s disrupting manufacturers in ecommerce? Due to the increase in ecommerce competition, more is expected from manufacturers. Direct sales have higher expectations, pricing is expected to be less complex, and marketing strategies have adjusted to accommodate the changes issued by the growth of ecommerce.