Price Wars Force Manufacturers To Snub Retailers In Favour Of Direct Sales
Manufacturers are being forced to consider more carefully who they distribute to and in some cases are opting to deal with customers directly as smaller retailers force their prices even lower, according to E-Business strategists at leading consultancy Echo E-Business.
Despite recent speculation of green shots of recovery in the economy, many struggling retailers are likely to continuing offering knock down prices in an attempt to maintain sales, and the strategy team at Echo E-Business predict that manufacturers may resort to limiting supplies for the larger retailers only and simply bypass smaller stores completely.
“Search engines and price comparison tools have made it much easier for consumers to compare products, and in an economic downturn, they will be even more price sensitive. When less reputable retailers lower their prices at just above the distribution price, this not only diminishes the value of the brand, but also places stress on the manufacturer and other retailers. I’ve seen a marked rise in manufacturers wishing to sell directly to customers as well as maintaining the relationships with quality retailers,” explains Deborah Collier, managing director and chief strategist at Echo E-Business.
