With the advent of e-commerce and the ease of creating a website, manufacturers can now skip the middleman, sell their own goods, and keep more of the profits.
How Manufacturers Can Pursue E-Commerce to Stay Ahead of the Competition
Michael Bird | Spindustry
Historically, manufacturers haven't been able to sell directly to consumers at scale. Without the selling infrastructure and physical space they need to reach a large and often disjointed audience, they’ve relied on dealers with the skills and means to buy goods at wholesale and distribute them.
Today, that business landscape is undergoing a seismic shift. With the advent of e-commerce and the ease of creating a website, manufacturers can now skip the middleman, sell their own goods, and keep more of the profits. Even in cases when order fulfillment and shipping cut into those profits a bit and make them comparable to the wholesale model, selling direct-to-consumer is rapidly becoming the new standard.
Manufacturers now have control. E-commerce frees them from running production on the basis of preseason order forecasts for each dealer. It also provides a wealth of information about customers, including who they are, how they found the product, and what they like or dislike about it.
The Time Is Now
While setting up an e-commerce platform for direct-to-consumer sales brings about obstacles including time, money, and the hassle of learning new technological systems, manufacturers can't let those hurdles stop them. If they decide not to develop e-commerce, their competitors will. According to research from the International Data Corp., about half of manufacturers will have direct-to-consumer capability by the end of 2020, and that number will only grow.
To avoid getting left behind, follow these three steps to get on board with an e-commerce initiative:
1. Create new processes
Begin by outlining your goals and identifying which obstacles might stand in your way. Certain processes can be moved online, but others will need to be invented from scratch. You'll have to determine how to approach taking orders, dealing with returns, and handling product registration. These processes all happen differently with consumers versus dealers or resellers, so they might feel like uncharted territory.
Even if you currently sell direct-to-consumer offline, creating an e-commerce site will require you to do a lot of careful planning to avoid any holes in the process. Think of it this way: If customers typically call in complex or custom orders, the human on the other end of the phone can typically make decisions and judgment calls about the transaction, such as determining shipping costs or delivery times, based on the conversation as it goes. Your site will need a configuration tool to enable customers to do that online, too.
More than that, the more power you give your customers, the more order volume you can process. And volume is critical. When you start dealing with thousands of consumers versus 100 B2B buyers, you must have in place a site that's prepared to handle questions, requests for special handling, etc.
Be ready and be capable. If you allow only limited purchases to be made online, that’s exactly what you’ll get.
2. Let e-commerce emerge
Once you have the right processes in place, determine what a successful e-commerce launch looks like for your business and take the necessary steps to support and nurture the site through the process. Start by tracking performance to see whether the site measures up. Utilize SMART goals, which should be specific, measurable, achievable, relevant, and time-bound. Instead of making your goal "more sales," for example, specify that you want your e-commerce site to yield a 20% boost by the end of the year — this number checks all of those boxes.
Make sure you also understand the systems that support e-commerce and how data plays a role in them: Can they communicate? How much work needs to occur for the data to be a valuable, available part of your e-commerce efforts? You may have to categorize for the web, clean up your data, and synchronize any data that's spread across sources.
That said, be mindful that the official site launch is just the beginning. Have a plan in place for site enhancements, tweaks, and maintenance over time. Further, support the launch with your digital marketing efforts and make paid promotion, blogging, social media, and email part of the process.
As your e-commerce solution emerges, create goals that help further your new B2C identity. Putting up a new site opens new doors to you as a company. It might let you expand from a national company to a global one, or it might take you from a product company to a service company. Think big.
3. Keep dealers in mind
Even with a robust, customer-facing e-commerce platform, it’s unlikely that you’ll stop selling to dealers entirely. Instead, work on optimizing sales so that they're as automated as possible. If systems aren’t already in place, allow dealers to make purchases online through a wholesale portal and reserve human customer service for more complex orders that need the attention.
Automated online processes allow you to collect data in online forms rather than compiling customer information on paper. With this automation, you’ll gain additional insights into how, when, and why dealers place orders, and these will allow you to serve the dealers better.
More than that, you can set up automated dashboards and alerts to know whether your team is completing tasks, which will save you time and free up your brain space to tackle other things. Automation also gets information to the right people and can even determine where to send it based on someone's role or the line they sell. It makes for a more well-informed dealer channel that's far more equipped to perform successfully.
Ultimately, when you’re creating something new, don’t start with a massive number of new processes all at once. Create a single step and test its effectiveness before moving on. It takes longer, but it results in a better system that sees more use from employees, dealers, and customers.
If you decide that the direct-to-consumer route isn’t a good fit, know that dealers will start expecting the kind of buying experience they’re getting more and more used to as consumers. The time is now to get on board with e-commerce and offer customers what they seek.
About Michael Bird
Michael Bird is the CEO of Spindustry, a digital agency focused on eCommerce, SharePoint portals, and enterprise websites. He has almost 30 years of experience in interactive development, user behavior, and business solutions. His successful agency, Spindustry, puts these strategies into practice to help businesses grow.
The content & opinions in this article are the author’s and do not necessarily represent the views of ManufacturingTomorrow
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