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Why Manufacturers Will Become the Next Big E-Commerce Brands

I’m always looking for the next big retail trend. When we opened the doors to Dotcom Distribution in 1999, a new, novel concept called “e-commerce” was the next big thing. Then came daily deals. Then subscription services. And eventually omnichannel eCommerce as we know it today. What’s next for commerce? Over the past few years, we’ve seen B2B brands moving to set up e-commerce channels.

But there’s another emerging trend that could steal the spotlight as the next big thing: M2C, or Manufacturer to Consumer e-commerce.

It’s exactly what it sounds like: factories and manufacturers of goods selling directly to the end consumer. For example, clothing factories almost always have leftover material after an order is complete, and they can use that material, along with their design and manufacturing expertise, to create their own garments and sell them to the public.

Although it seems like an obvious opportunity, M2C is a developing trend. Up until very recently, there hasn’t been a way for manufacturers to easily reach and sell to the end user.

Here are three reasons why M2C is the next wave in e-commerce:

1. Higher Quality, Lower Price

Selling a product through traditional retail channels highly inflates the price paid by the end user. Because of this, consumers are not always getting more quality for more of their money. On one M2C marketplace, pricing is displayed as the actual price to the buyer versus what the retail price of the product would be if purchased from a brand the factory worked with. This works in the customer’s favor, as the product quality may greatly surpass what they would otherwise purchase from a traditional retailer at a similar price.

The internet gives consumers access to more information than they’ve ever had. And because of this, buyers are more price-conscious, and more price-aware, than they’ve ever been. According to Dotcom Distribution’s 2019 E-commerce Consumer Study, 26 percent of online shoppers listed lower prices as their primary reason to buy online vs. in-store.

As the M2C market develops, we’ll likely see this trend evolve into online shoppers buying from M2C brands versus traditional brands, as they’ll be able to purchase a high quality product for less money than a brand name product of equal or lesser quality.

The M2C model allows shoppers to have their cake, and eat it too.

2. Convenience

Two top-of-mind considerations of consumers today are returns and speed of delivery. In fact, almost a third of online shoppers will pay more to receive their order faster, and 93 percent say that a free returns is an important factor when making an online purchase.

These expectations are not new, but will be embraced by M2C platforms to cater to the needs of the customer. One M2C marketplace in the fashion and apparel space established a partnership with DHL to make returns easy- customers simply bring the product to a DHL drop off location. The same marketplace fulfills customer orders within 24-48 hours.

3. Platform Development

As long as e-commerce has been around, there hasn’t been a dedicated, widely accepted platform for manufacturers to showcase and sell their products to consumers. With purpose-built marketplaces being created that handle everything but the manufacturing element of the transaction, it’s easier than ever for factories and manufacturers to reach the end user.

I expect to see many more of these M2C platforms popping up in the near future. What will they look like? They will be vertical-specific. They will handle marketing and billing, so the manufacturer can focus on production. And this is not just an opportunity for manufacturers- the next industry-leading M2C platform for toys, children’s apparel, shoes, and a slew of other product categories are ripe for development by entrepreneurial software developers; it’s a marketplace primed for creative disruption. Will you be the one to create the next e-commerce giant?