M2C is Here to Stay - Here’s What You Need to Know
Standfirst: M2C, otherwise known as Manufacturer-to-Consumer, seems to be a rising trend in ecommerce. Is it a new normal or just a passing fad?
Traditionally, manufacturers had very little means to get their products in front of their consumers. The conventional way was to sell to wholesalers and have them provide the retail space, manpower, and infrastructure to push the product to the end user. Wholesalers would buy in bulk from manufacturers and sell these products to consumers at a higher rate, making a profit from that.
Is M2C a New Concept?
However, the dotcom boom in the late 90s introduced a new way of shopping. Instead of visiting physical stores, consumers browsed and purchased products via the internet instead. This new way of buying and selling, supported by the development of logistics and faster internet connections, has gradually become more common over the years.
Everyone from retailers to manufacturers to small start-ups progressively hopped on the ecommerce bandwagon but nothing spiked the curve more than the COVID-19 pandemic at the end of 2019.
M2C Acceleration During the Pandemic
The recent pandemic spurred the tremendous growth of ecommerce as businesses were driven online in order to survive. Likewise, consumers were forced to do their shopping online as travel restrictions and nationwide closures of physical stores were put in place to help curb the spread of the COVID-19 virus.
People started buying things that they had never bought online before like groceries, furniture, and electrical appliances. Savvy manufacturers that were successful in reacting fast and pivoting also started selling directly to consumers online, cutting out the middleman.
Based on the Digital 2021—Global Overview Report, 69.4% of global internet users aged 16 to 64 specifically use shopping apps every month. This new normal of online shopping clearly shows that M2C is here to stay, and with it comes many benefits for you as a manufacturer as we will explore below.
Reduce Costs by Cutting Out the Middleman
Manufacturers have long relied on middlemen such as distributors, wholesalers, etc. to distribute products to consumers. However, every middleman or ‘layer’ in the distribution channel hikes up the cost of getting products to consumers.
In place of a conventional distributor or wholesaler, one way M2C businesses can reduce costs is to engage a fulfilment service provider. However, not all fulfillment services are alike and it’s best to make sure that the one you choose meets the needs of your business. This will keep your costs low so that you can keep prices fair for your target market.
Fulfilment by Everpeaks (FBE) not only provides warehousing that allows you to deliver globally at any time, but also provides duty-free storage that only requires duties to be paid once a sale is made. FBE also takes care of inventory management for you, and allows you to track and fulfil orders across all ecommerce platforms from a centralized cloud system, called the FBE System
Maintain Consistent Brand Representation
Your brand is best represented by yourself, as no one else understands it better than you. M2C allows brands to be directly in control of their identity, limiting third party involvement that may lead to misrepresentation.
Misalignment with design themes or marketing messaging, for examples, can ruin the carefully crafted brand identity that you want to present to your consumers.
Reduced Market Access Costs
It used to be expensive to expand a business to different geographical locations. You had to set up warehouses to store your products, figure out local logistics and fulfillment solutions, and understand local culture.
Miscommunication, delays, delivery failures, and other challenges are a thing of the past with integrated fulfillment services that manage everything from warehousing to centralized inventory and delivery. As a manufacturer looking to sell directly to consumers, outsourcing these things to a reliable fulfillment services provider can help you save, stay competitive, and increase profits in markets outside of your existing ones.
But First, Some Things to Consider…
Clearly, M2C is beneficial to manufacturers for many reasons. However, as with every business model, there are a few key things to consider when attempting to deal directly with consumers.
Does your business have a consumer brand? If yes, great. Go directly to consumers with that brand. If not, building up a strong grassroots brand will serve to further strengthen your attempt at selling directly to consumers.
The next thing to consider is whether to focus on ecommerce or a physical store?
A physical store allows you to get your products right in front of your consumers, engaging all their senses in the process of making an impression. The immediacy of this experience plays a significant role in the purchasing decisions a consumer makes.
Although choosing the ecommerce route doesn’t allow consumers to have a physical feel of your product, it is the fastest and easiest way to start out. All you have to do is set up an ecommerce website, and register seller accounts on the major ecommerce marketplaces (e.g. Lazada, Shopee, Amazon) in the country of your choice and start selling.
There is no worry about finding a suitable location for your store, hiring staff, renovation, and many more requirements needed to operate a physical store.
With ecommerce, all you need is a service to synchronize your inventory between the different marketplaces, an ecommerce website or platform, and a dependable fulfillment partner to fulfill orders to your customers.
Having these elements in place will give you ease of mind to navigate the international market, setting in place a clear structure for you to reach your customers directly.
Making a Decision
From production costs, delivery time, to final retail pricing for the consumer market; using the M2C model allows you to be in full control of every aspect of your business.
If you are a manufacturer looking for business expansion into the Southeast Asian market, then reach out to us today and find out whether Everpeaks is a good fit for your fulfillment needs.