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E-Commerce for Manufacturing Companies

E-Commerce-Strategien für produzierende Unternehmen und Marken Herstellern mit einer stationären Handelsstruktur die an der Kanalverschiebung und dem E-Commerce Wachstum partizipieren wollen.

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With the rapidly increasing use of the internet as an information medium and the large-scale relocation of business activities to online, global e-commerce sales have risen at a swift pace. There can be no doubt that the internet is the sales channel with the current highest growth dynamic – and that it will retain this status for the foreseeable future. The same growth is being seen in aggressively-priced selling by manufacturers’ commercial partners on online marketplaces, which often occurs in an unregulated manner and – particularly for medium-sized suppliers of branded products – is associated with risks. Accordingly, manufacturer-owned online stores are now a much-discussed potential solution for controlled distribution via the Internet. This is also of high relevance for manufacturing companies. A study by PwC (see diagram) found that depending on the type of goods, up to 68% of Germans today prefer online shopping over stationary distribution channels.

Einkaufskanaele von Warenkategorien

Abbildung 1: Bevorzugter Einkaufskanal verschiedener Warenkategorien; Quelle: PwC. 2012.

This proportion is likely to increase in the future. With this in mind, questions arise as to what extent manufacturing companies should establish a presence online, or even as to whether they should set up their own online shop to sell directly to their end customers. The digital “findability” of a product is not only of vital importance for its sales, but also constitutes an increasingly important element of the brand’s image.

It is essential for brand names, in particular, to exploit the opportunities of e-commerce to their fullest. According to a study by German market research group GfK, the e-commerce share of retail sales in the technology product segment lay at 43.7% in the year 2010 (this was followed by the hardware segment at 32.9% and the fashion segment at 23.4%). This finding indicates that businesses who do not engage pro-actively with e-commerce opportunities have been losing market shares for a number of years. It is also expected that the e-commerce trend will lead to a cross-industry shift in the market shares of each individual manufacturer.  Currently, many manufacturing companies manage their distribution almost exclusively via stationary channels, while the supplying of their products to Amazon is controlled by trade partners and not by the companies themselves. For all these reasons, it is of huge importance for manufacturing companies to engage intensively with potential external e-commerce distribution partners. The following diagram shows how such relationships could work.

FOSTEC helps make manufacturing companies and manufacturers future-proof by offering targeted preparation for the shift from offline to online channels. We advise on topics including (but not limited to) the following:

  • Modern commercial structures for manufacturing companies / manufacturers
  • Product assortment policies for manufacturing companies / manufacturers
  • Pricing policies for manufacturing companies / manufacturers
  • Dealing with marketplaces such as Amazon and eBay
  • Dealing with pure players
  • Possible e-commerce operational approaches for manufacturing companies / manufacturers
  • IT system landscapes for manufacturing companies / manufacturers
  • Search engine optimisation (SEO) of content for manufacturing companies / manufacturers
  • Organisational aspects of e-commerce for manufacturing companies / manufacturers
  • Distribution strategies for manufacturing companies / manufacturers
  • Options for the web presence of a manufacturing company / manufacturer
  • E-commerce strategies for manufacturing companies / manufacturers
  • Formation of a business model for manufacturing companies / manufacturers
  • Determination of the characteristics of your manufacturing operation
  • Development of a B2B portal for commercial partners of manufacturing companies / manufacturers
  • Types of external e-commerce distribution
  • Dealing with external e-commerce distribution partners from the following categories:
    • Pure players (e.g. Amazon, eBay, etc.)
    • Cooperative online commerce / Intermediaries
    • Multi-channel
    • Hybrid online commerce
  • and many more

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E-Commerce-Strategien für produzierende Unternehmen Want to learn more? FOSTEC recommends the book „E-Commerce Strategien für produzierende Unternehmen“ ("E-Commerce Strategies for Manufacturing Companies") by Markus Fost (Language: German).

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Download Lecture Notes for Free

As part of the Bachelor course in Business Administration at the Nürtingen-Geislingen University of Applied Science in Germany, Prof. Dirk Funck teaches students about the management of cooperation in commerce. Within the context of this teaching, Markus Fost of FOSTEC Commerce Consultants holds regular guest lectures on the topic of e-commerce strategies for manufacturing companies.

E-Commerce-Strategien-fuer-Hersteller-FostecMarkus Fost’s lecture can be downloaded here for free. To obtain access, please fill in the following form. You will then be sent the download link for the German-language presentation E-Commerce Strategien für produzierende Unternehmen (“E-Commerce Strategies for Manufacturing Companies”)

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We hope you learn a lot while reading! Please feel free to get in touch with questions or requests for more detailed information.

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