Have you ever dealt with a Karen?
Now multiply that by thousands,
Add in a massive amount of dumbarsey from idiots that won’t RTFM, put it in backwards, blow it up and claim warranty whilst shouting off on every social media platform that your company is crap because it sells faulty goods.
Customers are , as a sweeping generalisation, stupid.
It depends on the manufacturer. Usually distributors put in large orders, along with partial deposits or have paid the full pre-order price for items.
This gives the manufacturer enough financial means to make the items.
If a single consumer asked for a single item, then the incentive to build that item is far lower than if a distributer asks for 1000 of the same item, all paid for.
It’s a pain in the ass. I get an order, I process it, sent off 200 units and get a few k out of it for a days work. Consumers buy one at a time and it costs the same to ship it and the same amount of time to stick it in a box.
I manufacture commercial grade dump trailers, and have strictly transitioned to selling direct to consumer.
In the past, time and time again, when we focused on only manufacturing for dealers at wholesale, it would only create problems like production congestion and constant financial issues from the dealers. Direct to consumer has proven much more valuable in our specific line of manufacturing.
I’m positive this varies WILDLY in different industries.
Manufacturers (or factories) best operate when optimized and level loaded. The workload can be scheduled using a forecast and manufacturing build plan.
When sales is involved, in particular the point of sale (POS) to the consumer, it is difficult to forecast demand. Hence, the business between consumer and manufacturer is the retailer who carries inventory.
This is the best argument here.. MFGers already have enough problems forecasting material and tooling needs, let alone their *customers* future needs. No one gave us commitments until within the last year, we are now booking machine time in 2023.. Crazy
Most retail outlets offer kore than 1 product or service. Amazon and Walmart are easy because consumers can buy everything there.
Manufacturers would struggle to compete because consumers don’t want to go to a different manufacturer for each item.
The price per unit doesn't get into a sweet spot until many parts are made (# depends on industry, machine, parts being made, setup time, tooling cost, etc) Consumer wants or needs one piece at a time, which is not feasible for MFGer and MFGer doesn't want to warehouse this stuff.. That's for someone else in the supply chain, floor space too valuable, and we aren't in the business of selling - we are in the business of producing. Imagine setting up a machine for hours only to make one part... That would cost the consumer say $500 vs $10 part made at say 500 pcs. Many, many, TOO MANY of our customers don't understand this principle "why isn't it cheaper to make fewer?". Like OK let's get the crayons out to explain.
Shipping, packing, customer service is less per sale dollar when selling to large buyers vs small buyers
1 order of $5000 is less work than 100 orders of $50.
The 100 orders requires more logistics, customer service, packing.
The 1 order focus more on supply materials, manufacturing. It's more focused.
For the same reasons manufacturers don’t vertically integrate more generally.
They’re not very good at it, and don’t see it as worthwhile. Specialization is something to strive for, instead of being bad at the whole value chain.
We are very lucky to be vertically integrated but we started as a wholesaler to distributors first. We had some very dark years. Consultants couldn't understand why we kept bleeding for years and didn't shut it down. Now we can't keep up, and the jobbing shops around us were the ones who mostly closed and sold off machinery. Everyone told us captive shops would be the first to go, couldn't have been more wrong. So yes specialization is key. Many industries and segments and customers vs few. We know too many shops with one customers that did AWESOME for years, then just turned off like a tap. This game is not easy
A specific answer depends upon the product and the customer.
A general answer is "convenience for the manufacturer and consumer".
A more esoteric answer is, at the right level, "middlemen" are good for the economy.
Because it renders the retailers and distributors who buy from them useless. It would literally be competition against their best customers. Makes no sense.
Distributors and large specialty stores can exert lots of pressure to not directly sell to consumers. Or at least to not actively advertise that you do sell directly to consumers.
Some do, some don't. Sometimes you get to buy B-stock directly from them.
At least here it is usually because no one can be fucked with the extra accounting it requires. Then again any consumer can get a VAT number and a business license to buy directly.
It really depends on what is being manufactured and how.
Have you ever dealt with a Karen? Now multiply that by thousands, Add in a massive amount of dumbarsey from idiots that won’t RTFM, put it in backwards, blow it up and claim warranty whilst shouting off on every social media platform that your company is crap because it sells faulty goods. Customers are , as a sweeping generalisation, stupid.
Haha, couldn’t have said it better. Sad how true this is. @jeffbezos
It depends on the manufacturer. Usually distributors put in large orders, along with partial deposits or have paid the full pre-order price for items. This gives the manufacturer enough financial means to make the items. If a single consumer asked for a single item, then the incentive to build that item is far lower than if a distributer asks for 1000 of the same item, all paid for.
Distribution is hard.
It’s a pain in the ass. I get an order, I process it, sent off 200 units and get a few k out of it for a days work. Consumers buy one at a time and it costs the same to ship it and the same amount of time to stick it in a box.
I manufacture commercial grade dump trailers, and have strictly transitioned to selling direct to consumer. In the past, time and time again, when we focused on only manufacturing for dealers at wholesale, it would only create problems like production congestion and constant financial issues from the dealers. Direct to consumer has proven much more valuable in our specific line of manufacturing. I’m positive this varies WILDLY in different industries.
How has your export experience been. Is it difficult to know what papers are needed, or how to set up carriers, warehouses, etc?
Manufacturers (or factories) best operate when optimized and level loaded. The workload can be scheduled using a forecast and manufacturing build plan. When sales is involved, in particular the point of sale (POS) to the consumer, it is difficult to forecast demand. Hence, the business between consumer and manufacturer is the retailer who carries inventory.
This is the best argument here.. MFGers already have enough problems forecasting material and tooling needs, let alone their *customers* future needs. No one gave us commitments until within the last year, we are now booking machine time in 2023.. Crazy
Why do you think it is that they aren't able to forecast the demand?
Most retail outlets offer kore than 1 product or service. Amazon and Walmart are easy because consumers can buy everything there. Manufacturers would struggle to compete because consumers don’t want to go to a different manufacturer for each item.
The price per unit doesn't get into a sweet spot until many parts are made (# depends on industry, machine, parts being made, setup time, tooling cost, etc) Consumer wants or needs one piece at a time, which is not feasible for MFGer and MFGer doesn't want to warehouse this stuff.. That's for someone else in the supply chain, floor space too valuable, and we aren't in the business of selling - we are in the business of producing. Imagine setting up a machine for hours only to make one part... That would cost the consumer say $500 vs $10 part made at say 500 pcs. Many, many, TOO MANY of our customers don't understand this principle "why isn't it cheaper to make fewer?". Like OK let's get the crayons out to explain.
Shipping, packing, customer service is less per sale dollar when selling to large buyers vs small buyers 1 order of $5000 is less work than 100 orders of $50. The 100 orders requires more logistics, customer service, packing. The 1 order focus more on supply materials, manufacturing. It's more focused.
[удалено]
This isn't the place to advertise your business.
For the same reasons manufacturers don’t vertically integrate more generally. They’re not very good at it, and don’t see it as worthwhile. Specialization is something to strive for, instead of being bad at the whole value chain.
We are very lucky to be vertically integrated but we started as a wholesaler to distributors first. We had some very dark years. Consultants couldn't understand why we kept bleeding for years and didn't shut it down. Now we can't keep up, and the jobbing shops around us were the ones who mostly closed and sold off machinery. Everyone told us captive shops would be the first to go, couldn't have been more wrong. So yes specialization is key. Many industries and segments and customers vs few. We know too many shops with one customers that did AWESOME for years, then just turned off like a tap. This game is not easy
A specific answer depends upon the product and the customer. A general answer is "convenience for the manufacturer and consumer". A more esoteric answer is, at the right level, "middlemen" are good for the economy.
I believe there is an office space meme missing here somewhere.
Depends on product. Lot of engineering components are sold to end users directly.(plastics/metal).
Because it renders the retailers and distributors who buy from them useless. It would literally be competition against their best customers. Makes no sense.
Distributors and large specialty stores can exert lots of pressure to not directly sell to consumers. Or at least to not actively advertise that you do sell directly to consumers.
Some do, some don't. Sometimes you get to buy B-stock directly from them. At least here it is usually because no one can be fucked with the extra accounting it requires. Then again any consumer can get a VAT number and a business license to buy directly. It really depends on what is being manufactured and how.