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Manufacturing eCommerce vs Traditional eCommerce

Key Takeaways
  • Manufacturing and distributing eCommerce refers to the online business model that involves the production and sale of physical goods through digital platforms.
  • It encompasses the entire process, starting from the manufacturing or sourcing of products to their distribution and delivery to established and new customers.
  • Manufacturers or distributors establish an online presence, often through a website or an online marketplace, where they showcase their products, manage inventory, and handle customer relationships and orders.
  • B2B eCommerce model allows for seamless transactions, wider reach, and efficient supply chain management, enabling manufacturers and distributors to reach a larger customer base and streamline their operations in the digital marketplace.
manufacturing e-Commerce platform

Some people like to say all B2B commerce is the same; it is just buying and selling online. Those people would be wrong. Just like there are many different types of businesses, there are different types of eCommerce businesses.

Whether you sell direct to consumers, run a multi-tenant site, manufacture, or distribute, your business has its own unique set of needs. Today we are going to be looking at how manufacturing and distributing eCommerce businesses and platforms contrast with traditional eCommerce.

Traditional eCommerce

When we say “traditional” eCommerce, we are referring to cookie-cutter B2C eCommerce operations and platforms. Business-to-consumer companies were the first to begin selling online to consumers and became the mold for the various other types of businesses adopting online selling as a sales channel.

Manufacturing/Distribution eCommerce

Some distribution eCommerce platforms are specially developed for manufacturers and distributors. These platforms take into consideration the specific needs that go along with manufacturing and distributing and are geared towards making the business process quicker and employees' jobs easier.

An eCommerce store with a personalized catalog for new customers.

Customization for the Manufacturing Industry

B2B eCommerce platforms designed for the manufacturing industry and distribution eCommerce solutions have more focused customization options than traditional eCommerce platforms. Since those platforms are designed with specific purposes in mind, developers are better able to build and customize a B2B eCommerce platform to suit manufacturers and distributors.

Some of the various customization capabilities available include customer-specific pricing options, automated shipping estimates abilities, and displaying detailed inventory data and lead times.

Marketing and SEO for the Manufacturing Industry

While marketing, search engine optimization, and social media are useful for both traditional eCommerce and manufacturing eCommerce integration, the ways to reach potential customers and methods for handling each are done very differently.

Marketers for B2C eCommerce focus on appealing to a customer's emotions; companies in the manufacturing industry, on the other hand, market using cold, hard facts. Social media, especially, is usually more important and beneficial for traditional eCommerce that sells directly to consumers than B2B businesses like manufacturers and distributors.

BI and Reporting

A key feature that is important to manufacturing custom eCommerce is having a B2B eCommerce platform that has built-in eCommerce business intelligence (BI) and reporting or is integrated with an ERP system that has it. Business intelligence in eCommerce tools help manufacturers handle the large amounts of data they collect daily from distributors, suppliers, and existing and new customers. BI also enables manufacturers and distributors to better manage and reduce their costs while increasing their profit.

Integration of Business Processes

While both traditional eCommerce platforms and platforms designed for manufacturers and distributors have integration abilities, the latter is developed to seamlessly integrate with systems that are especially useful for manufacturing and distributing. Inventory systems and third-party shipping providers can all be easily integrated with eCommerce manufacturing platforms, along with ERP and CRM systems.

Integrations between your business systems and eCommerce platform allow manufacturers and distributors to view and display real-time inventory information and count to their employees, existing customers, and new customers. It also allows your business intelligence tools to provide you with more accurate reports, information, analysis, and predictions.

Ecommerce website with inventory analytics for new customers.

The Key Differences Between Conventional eCommerce and B2B eCommerce for Manufacturing

The main differences include:

Involvement in Production

One of the primary differences between conventional and manufacturing industry B2B eCommerce lies in the level of involvement in production. In conventional eCommerce, the focus is primarily on the sale and distribution of products. Retailers or online marketplaces typically source their products from various manufacturers or suppliers. They do not have direct control over the production process and rely on existing inventory.

In B2B eCommerce manufacturing, however, the business is involved in the production of goods. Manufacturers or distributors have control over the entire production process, from sourcing raw materials to manufacturing the final product. This level of involvement allows for greater flexibility and the ability to tailor products to specific customer demands based on the analysis of customer relationships.

Control Over the Supply Chain

Conventional eCommerce relies heavily on the existing supply chain. Retailers or online marketplaces depend on suppliers or manufacturers to provide products and manage inventory. They have limited control over the supply chain and must rely on effective communication and collaboration with suppliers to ensure timely deliveries.

Manufacturing for B2B eCommerce, on the other hand, allows for greater control over the supply chain. Manufacturers or distributors can streamline the entire process, from sourcing raw materials to shipping the finished products to old and new customers. This control enables them to optimize operations, reduce costs, and ensure timely delivery of goods.

Product Customization

Product customization is another notable difference between the two models. Conventional eCommerce primarily focuses on selling standardized products that are readily available in the market. Both existing and new customers choose from the available options and variations offered by retailers or online platforms.

In eCommerce manufacturing, customization plays a crucial role. Manufacturers have the ability to produce products according to individual customer requirements. They can offer a range of options, such as color choices, sizing, or personalized features. This customization capability allows for a more personalized customer experience and caters to specific customer preferences.

Inventory Management

Inventory management varies significantly between conventional eCommerce and eCommerce for manufacturing. In conventional eCommerce, retailers often rely on just-in-time inventory management, where products are sourced as per customer orders. This approach helps minimize storage costs and ensures efficient use of resources.

In eCommerce manufacturing, inventory management is more extensive. Manufacturers or distributors maintain their inventory of raw materials, components, and finished products. They need to manage stock levels, track production timelines, and ensure efficient utilization of resources. Effective inventory management is crucial to meet customer demands, avoid stockouts, have an accurate product catalog, and optimize production efficiency.

Time to Market

Time to market refers to the speed at which products can be brought to market. Conventional eCommerce usually has shorter time to market as retailers can quickly source products from existing suppliers or manufacturers. They rely on the efficiency of their supply chain to fulfill customer orders promptly.

In manufacturing commerce, time to market can vary depending on the production process. Manufacturers need to consider factors such as raw material availability, production lead times, and customization requirements. The production timeline can be longer, especially for complex or customized products. However, manufacturing provides the advantage of adapting to market trends and customer demands by quickly launching new products or variations.

Profit Margins

Profit margins also differ between conventional eCommerce and eCommerce manufacturing. In conventional eCommerce, retailers or online platforms often operate on thin profit margins due to competition and price sensitivity. They rely on high sales volumes to generate profits.

Manufacturing commerce offers the potential for higher profit margins. By controlling the entire production process, manufacturers can optimize costs, reduce overheads, and capture more of the value chain. Additionally, customization options allow for premium pricing, further boosting profit margins. However, manufacturers also bear the responsibility of covering production costs, including raw materials, equipment, and labor.

Brand Control

Brand control is a critical aspect that distinguishes conventional eCommerce from eCommerce for manufacturing. In conventional eCommerce, retailers or online platforms primarily focus on selling products from various brands. They act as intermediaries, promoting and distributing products on behalf of the brand owners. Brand control lies in the hands of the product manufacturers or brand owners.

In manufacturing, manufacturers or distributors have direct control over their brands. They have the opportunity to establish their brand identity, positioning, and customer perception. This control allows for better brand building, reputation management, and the ability to differentiate from competitors.

Scalability

Scalability refers to the ability of a business model to handle increased demands and expand operations. Conventional eCommerce is known for its scalability, as online platforms can quickly add new products or partner with additional suppliers to meet growing customer needs. The infrastructure and systems are already in place, allowing for rapid scaling.

Manufacturing commerce presents scalability challenges. Scaling up production requires careful planning, investment in additional resources, coordination across the entire supply chain, and maybe a new online store. Manufacturers need to balance production capacity with customer demands, ensuring smooth operations during periods of growth.

Scaling a manufacturing online store for new customers on an e-Commerce platform

Manufacturing Commerce Solutions for Better Sales Channels

The key differences between conventional eCommerce and manufacturing commerce lie in the level of involvement in production, control over the supply chain, product customization, inventory management, control by the sales team, improved sales channels, time to market, profit margins, brand control, and scalability.

Manufacturing commerce provides greater control over the production process, customization options, and brand identity, but it requires more extensive inventory management and faces longer time-to-market timelines.

While conventional eCommerce focuses on selling existing products, manufacturing involves the production and distribution of goods, enabling manufacturers or distributors to establish their brand presence and optimize the supply chain. It's time to find a platform that will help with your eCommerce website, better your online marketing, improve sales channels, make online sales easier, and improve your customer relationships.

Clarity Helps the Manufacturing Industry

Want to know more about manufacturer eCommerce pros and cons and the digital transformation that will improve your sales team results? If you are a manufacturer or distributor looking for a custom eCommerce solution for your business, look no further than Clarity Ventures to help with your digital transformation.

Clarity specializes in offering a wide variety of business solutions for B2B businesses, manufacturers, and distributors including eCommerce sites and B2B ERP integration and implementation. To find out more about implementing digital marketing and eCommerce offered by Clarity for manufacturers and distributors, get in touch for a complimentary discovery session. We'll help you make the right decisions for optimizing online purchasing for your manufacturing business.

FAQ

 

Manufacturing and distributing eCommerce refers to the process of selling products directly to customers through online platforms, involving both the production and distribution aspects of the supply chain. It involves manufacturers or suppliers utilizing e-Commerce platforms to showcase and sell their products, bypassing traditional retail channels.

Manufacturing e-Commerce involves the production of goods specifically for online sales, while distributing eCommerce focuses on efficiently delivering these products to customers. This model allows manufacturers to connect directly with consumers, eliminating intermediaries and reducing costs. It offers convenience, wider product selection, and seamless order fulfillment, creating a streamlined and custom experience in the digital marketplace.

 

Manufacturing B2B eCommerce involves the seller's direct involvement in the production process, providing greater control over the supply chain, customization options, and brand image. It requires managing inventory and potentially longer time to market. On the other hand, traditional eCommerce relies on suppliers or wholesalers, offering faster time to market, lower profit margins, and less control over the production process. Both involve research online by new customers in order to find the product they need.

Traditional eCommerce is often easier to scale, while manufacturing commerce requires more investment. However, these differences may vary depending on specific business models and industries within manufacturing and traditional eCommerce.

 

Yes, manufacturing software can integrate with an eCommerce platform. By integrating the two systems, manufacturers can streamline their operations and enhance the customer experience.

The integration with the eCommerce platform allows for real-time synchronization of inventory levels, order processing, and production scheduling. It enables manufacturers to manage their inventory effectively, automate order fulfillment, and provide accurate product availability information to customers.

This integration also facilitates seamless communication between manufacturing and eCommerce teams, ensuring smooth coordination between production and sales. Overall, integrating manufacturing software with an eCommerce platform improves efficiency, reduces errors, and enhances the overall performance of the business.

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Author
 
Stephen Beer is a Content Writer at Clarity Ventures and has written about various tech industries for nearly a decade. He is determined to demystify HIPAA, integration, and eCommerce with easy-to-read, easy-to-understand articles to help businesses make the best decisions.

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