There has been a lot of focus on the B2C and B2B worlds. However, we are on the verge of being a Manufacturer to Consumer (M2C) global economy. With the advances that have been made in the global small parcel business, you can manufacture a product in just about any part of the world and deliver the order via small parcel service to the primary mass populations.
This concept has been around for more than a decade but is starting to take shape. A great example of this is when Apple launched its latest iPhone version and was taking “pre-orders.” This “direct from factory” approach will impact many wholesalers, retailers, e-tailers, and omni-channel providers.
Let’s look at one of the most difficult commodities and one that has multiple channels… the carpet industry. If you were able to go online and order new carpeting for your house from a factory in India that had the style, quality, price and color and have it delivered to your house (pre-cut by room size) in 7-10 days, then you would probably do it. This will also be less expensive than going to the local carpet store and, of course, if it has FREE SHIPPING… that would truly be amazing.
The retail industry could have a new competitor. This approach will eliminate multiple levels of mark-up and provide the lowest landed cost to the consumer. Price-conscientiousness is a key attribute of buyers online. This could be a threat to Amazon, who has invested billions in setting up a global network to get closer to the consumer. In the near future, Amazon’s strategy to be close to the consumer is spot on and it will be a dominant player in the e-commerce space.
As the new “low cost” manufacturing countries come online, they will continue to challenge the traditional retail model. All of the major global players (DHL ,FedEx & UPS) are building up their infrastructures in these countries in preparation of this new model.
The e-commerce world is getting smaller each day, and it is easier to place orders. The consumer really doesn’t care where the product comes from… they just want a good price, good quality and, of course… free shipping!
M2C… the new e-commerce challenger option!
Michael J. Ryan is the Executive Vice President –Parcel Solutions at ProStar Logistics and has over 25 years experience in the parcel industry. He can be reached at 708.224.1498 ormichael.ryan@prostar.com.
This concept has been around for more than a decade but is starting to take shape. A great example of this is when Apple launched its latest iPhone version and was taking “pre-orders.” This “direct from factory” approach will impact many wholesalers, retailers, e-tailers, and omni-channel providers.
Let’s look at one of the most difficult commodities and one that has multiple channels… the carpet industry. If you were able to go online and order new carpeting for your house from a factory in India that had the style, quality, price and color and have it delivered to your house (pre-cut by room size) in 7-10 days, then you would probably do it. This will also be less expensive than going to the local carpet store and, of course, if it has FREE SHIPPING… that would truly be amazing.
The retail industry could have a new competitor. This approach will eliminate multiple levels of mark-up and provide the lowest landed cost to the consumer. Price-conscientiousness is a key attribute of buyers online. This could be a threat to Amazon, who has invested billions in setting up a global network to get closer to the consumer. In the near future, Amazon’s strategy to be close to the consumer is spot on and it will be a dominant player in the e-commerce space.
As the new “low cost” manufacturing countries come online, they will continue to challenge the traditional retail model. All of the major global players (DHL ,FedEx & UPS) are building up their infrastructures in these countries in preparation of this new model.
The e-commerce world is getting smaller each day, and it is easier to place orders. The consumer really doesn’t care where the product comes from… they just want a good price, good quality and, of course… free shipping!
M2C… the new e-commerce challenger option!
Michael J. Ryan is the Executive Vice President –Parcel Solutions at ProStar Logistics and has over 25 years experience in the parcel industry. He can be reached at 708.224.1498 ormichael.ryan@prostar.com.
