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My prediction is that we'll see a massive rise in manufacturers selling directly to consumers as e-commerce companies disintermediate traditional retailers. Th
by CSMastermind 3y ago
My prediction is that we'll see a massive rise in manufacturers selling directly to consumers as e-commerce companies disintermediate traditional retailers. There's so much margin compression and headache to be captured if you can enable manufacturers to go around the big box stores of the world.
- nickff 3y agoThere has already been a dramatic increase in the number of manufacturers selling directly to consumers over the past few decades, both online and via manufacturer-controlled retail stores. Look at brands like Nike, Adidas, Microsoft, Apple, Le Creuset, etc.
- quickthrower2 3y agoTesla famously.
- ethbr1 3y agoAll of these are established brand names though. On the one hand, going over the top of big box allows you to establish a direct customer relationship and keep profits. On the other hand, it removes the quality imprimatur that being stocked in a big box confers. Ceteris paribus, why take a risk on one of 1,000 new internet brands, when you know better what you're getting with a megabrand? Which is probably why you see internet brands succeed best in the disposable space (e.g. fast fashion), where quality is not a differentiator.
- quickthrower2 3y agoThere are exceptions. The Niche Zero coffee grinder is direct from manufacturer but is high quality. In addition a lot of what they sell in stores is crap. To the point I would go online to find the same thing to get better quality. The caveat being caveat emptor: DYOR.
- gumby 3y agoPhysob brands have been launching online-only, even Amazon-only for a long time. Anger is one who built a popular brand with only an Amazon presence.
- TylerE 3y agoWhen has being stocked by big boxes been a sign of quality? Maybe real old school department stores zzz but Walmart and Target?
- maxerickson 3y agoCompared to an unknown, yeah, the store brands at Walmart and Target do communicate some reasonable minimum level of quality. I think Walmart does a better job of it than a lot of smaller grocers. "Great Value" whatever will be pretty cheap (in terms of both cost and value), but it won't be garbage in a package.
- h0l0cube 3y agoShoes are the one thing I’ll go to a store for. It’s a real struggle to find a good fit, and there’s some manufacturing variance, even with the same model
- lotsofpulp 3y agoFor clothing and shoes, I order 3 sizes, and return 2.
- gumby 3y agoIn most case the two you return are discarded. I don’t think that’s sustainable in the long run.
- ryandrake 3y agoThat’s a choice of the retailer or manufacturer though. Whether it is sustainable is their problem. My wife buys 20 outfits and returns 19 of them. If the clothing manufacturer is really throwing them away then they are very wasteful.
- gumby 3y agoI’m sorry I was ambiguous. I didn’t mean “unsustainable” in the ecological sense (though I think that’s true as well). I meant that free returns, especially but not only in clothes, is expensive and of course is baked into purchase price. For some reason brick and mortar shops can resell the product (and often reject returns if not) while e-commerce do not. I feel like Amazon pioneered this for the same reason clothes sellers do, but Amazon is so dominant it could be clouding my memory. In any case, I think the inexorable downward pressure on pricing will make the overpurchase/free return in clothing too expensive, and it will be dropped. Amazon famously cuts off customers who return too much: https://finance.yahoo.com/news/amazon-permanently-banning-customers-too-many-returns-230130372.html https://finance.yahoo.com/news/amazon-permanently-banning-cu... They are supposedly trying cut the returns cost: https://www.cnbc.com/2022/04/10/how-amazon-plans-to-fix-its-massive-returns-problem.html https://www.cnbc.com/2022/04/10/how-amazon-plans-to-fix-its-... Apparently the term is “reverse logistics”: https://www.newyorker.com/magazine/2023/08/21/the-hidden-cost-of-free-returns https://www.newyorker.com/magazine/2023/08/21/the-hidden-cos...
- Racing0461 3y agoI hope so. There is one more middleman we need to kill. People buying stuff off alibaba, adding their logo/branding to it and selling it for a "first world price". I want to pay what the people in china is paying + cost of shipping/handling.
- lotsofpulp 3y agoYou can. Aliexpress.com
- Racing0461 3y agoI want curation/acountability and someone to sue tho.
- shiroiuma 3y agoThat's why you have to pay the "first world price" you were complaining about above. You can't have it both ways: either pay the first-world price and get curation/accountability, or pay the direct-from-China price and get neither.
- Racing0461 3y agoThat's what i'm saying. There is no direct from china price. It's all "first world pricing".
- shiroiuma 3y agoI'm sorry, I don't understand. You can get the direct-from-China price by shopping on aliexpress.com. There's no curation, there's tons of copycats (they probably come from the same factory though), the quality is all over the map, returns are generally impractical, but the price is cheap. Or you can buy made-in-China stuff locally and pay the first world price, but there's some curation and accountability there.
- lotsofpulp 3y ago
- 8note 3y agoWhat does direct for this mean? Isn't this already the case with electronic intermediaries instead of brick and mortar ones?
- sokoloff 3y agoDirect would be a manufacturing brand selling to an end-consumer without an intermediary. Buying an iPhone from Apple: direct Buying an iPhone from Amazon/Walmart/Target/BestBuy: not direct.
- lxm 3y agoYet I see a bunch of older brands that started direct-to-consumer eventually succumb to retail temptation, probably due to lower customer acquisition costs and bulk shipping: * Harry’s razors are now at Target and Costco * Casper mattresses at Macy’s * Allbirds sneakers at Nordstrom Rack
- erik_seaberg 3y agoI think Purple mattresses showed up on a shelf at Costco last week. I don’t know how many they can sell in small sealed boxes (do they explode like inflatable rafts?) without a demo unit.