3. E-Commerce Styles

3.1. Buying directly from the manufacturer

With the web now becoming an even playground for manufacturers and retailers, the dynamics of how business will do business in the new millennium have been redefined. But the real picture is not as rosy from the manufacturers' point of view as conflicting interests with retailers has negated the growth potential of manufacturers. We are presenting the real story and viewpoints of both retailers and manufacturers.

Consumers today are turning to manufacturers` web sites for product information before they even begin thinking about where to buy something. They return to the manufacturer's site during and even after the sales cycle for support, related purchases and information. According to Forrester Research, 77% of consumers expect manufacturer web sites to have the best product information and 75% say they should be useful for post-purchase information.

Suddenly, manufacturers have found themselves in a position to influence sales and customer satisfaction in a way that never has been available to them before. And manufacturers are not standing idly by. Some 85 percent of manufacturers have strategies to form and develop relationships with individual consumers through the Internet and other channels. While they do not plan an abrupt shift to direct selling, they do predict a jump in sales.

Initially, consumers visit manufacturers` sites to find detailed product information with which to make a purchasing decision. After the sale, consumers return for support, accessories, and opportunities to get the most from the product they've purchased. Meanwhile, manufacturers are looking for ways to establish stronger relationships with those consumers to build their brand and to influence the decision. But not every manufacturer is selling on the web. They all have different strategies or the Internet which are discussed below.

Emergence of the New Model

Distributing products used to be cut and dried. Manufacturers turned out the product, and then established networks of resellers; VARS and dealers sold that product to consumers, and took a cut of the total profit. Enter the Internet, and the lure of selling directly to the end user in order to pocket all the profit. Dell Computer Corp. doesn't use indirect channels, and doesn't have to share the profits with its sales channel partners.

This is the kind of dangerous thinking that cost major retail manufacturers like Levi Strauss, Reebok and Starbucks millions in direct-via-Web infrastructure costs and channel partner alienation. Within weeks of launching their online entities, these manufacturers scrapped the operations in response to channel conflict with distribution partners.

These companies' distributors aren't alone in viewing direct Internet sales as an encroachment on their space and the problem is not unique to the retail space. In a recent study by Reality Research & Consulting, 57 percent of the resellers surveyed said that they would stop recommending a product if the manufacturer started selling it directly to end-users. Fourteen percent said they would drop a brand completely if this happened. It wasn't long before a similar pattern developed among the B2B manufacturers.

While some manufacturers sell directly to consumers, others prefer to use the online channel to generate leads for their dealers and retail partners. Many of these sites, however, don't compel the user to take the actions necessary to generate a lead. They may lead the visitor through online product configuration, option selection, and rendering of a customized image but then that's it--a dead end.

A principal concern among manufacturers and retailers conducting commerce on the web revolves around channel conflict. Should the manufacturer sell direct to consumers or, instead, refer them to retail channel partners?

Manufacturers are resolving this issue in several ways. Those with very strong brands like Sony, Life Fitness, Bose, and Timex sell direct, confident that their retail partners will still want to carry their products and that both channels will flourish.

Other manufacturers offer web-only product lines. Nike allows consumers to customize and then purchase products online, such as shoes, gear, and golf balls. Customization not only offers a way around channel conflict (retailers generally don't have the resources or time to offer customized products), but also helps manufacturers prevent commoditization of their products.

Some manufacturers are selling direct and at the same time offering consumers the option to purchase from retail partners, with visibility to product availability and prices. The manufacturer's own price--usually the MSRP--may be displayed as well in the comparison, all the more reason to offer exceptional customer service, support and environments online to overcome price differentials with discount retailers.

Manufacturing leaders are ahead in planning their direct-to-consumer activity in North America and Europe. While in Asia Pacific, manufacturers reflected a tendency to respect the current channels of delivery to the consumers. In Japan, for example, merely discussing the possibility of going direct to the consumer was met with reservation.

If you want to buy directly from the manufacture (I assume you are buying a product of a reputed brand), run a check for their name in google.com and once you find their official website, browse it to learn if they are selling direct or not. If there is provision of direct selling and you want to buy directly bingo, just go ahead, if not explore other options. There are always a host of retailers who are selling all the brands and all the products.