Manufacturers have long relied on retailers to present their goods to the general public, and these middlemen have taken care of the marketing and selling of various products. However, in the digital age, the manufacturing industry is changing, and some manufacturers are wondering whether they should sell their goods directly to consumers. Here are some of the reasons why this change could work for your business.
A bigger profit share
Under the old model, manufacturers often made a small profit, while the retailers would get the biggest share. The retail mark up on most products is about 50%, so if they buy something from the manufacturer for a dollar, then they’ll sell it in stores for $2. This covers the large overheads that come from retail, such as the costly business rents, staff wages and marketing.
When you sell something direct to the consumer, depending on the method, your overheads are often lower. So that item that you sold to retailers for a dollar could potentially be sold directly to the consumer for $1.50. You make more money and the customer gets a cheaper price.
Platforms for selling
Selling online is the most obvious choice for manufacturers who want to sell direct to customers. You can launch an online store easily, with software such as Shopify making it simple to set up product pages and a checkout. However, you then need to market your store and get people to visit your website.
Platforms such as Amazon and Etsy are becoming popular ways to sell directly. Optimize your product titles and keywords and you’ll appear in search results when people visit these platforms. While you’ll pay a fee, it’s often cheaper than running your own store. Amazon is often used by large manufacturers for high volume sales, while Etsy is more for artisan craftspeople who want to sell one of a kind items.
Some manufacturers have their own shops on site. This means you can sell your products from a brick and mortar location, and it doesn’t take much to set up. It can be difficult to draw people in, especially if you’re based in an area that’s mostly industrial, so you may want to get some decent signage from Guthman Signs and create a shopfront that makes it stand out from the surrounding buildings.
Convenience for customers
Many types of sales made directly from manufacturers are a result of customers wanting greater convenience. For example, subscription boxes. This has become a popular way for customers to stock up on everything from laundry pods to beauty products, and there are even some weird subscription boxes out there such as the service that delivers Halloween items all year round. When you sell to consumers, convenience is key, and if you sell via platforms such as Amazon, you can offer recurring deliveries that help you build brand loyalty.
There are many reasons why it’s becoming more popular for manufacturers to sell direct. It’s mostly to do with the fact that selling to consumers is so easy nowadays, in a few hours you can set up a platform and be shipping to people. It could mean greater profits for your firm and less time dealing with suppliers.