Beijing on April 1st news, according to foreign media reports, "New York Times" recently published an article that, a number of small e-commerce companies are trying to get rid of the intermediate links of commodity circulation process, so that consumers and manufacturers direct docking, and reduce cost, improve profit margins. They also use the opportunity to work with manufacturers to learn from the practice of big brands. This business model has been favored by venture capital companies.
the following is the main content of the New York Times article:
Warby Parker is a start-up company selling glasses on the Internet, the founder of the company wanted to know what caused the cost of a designer glasses up to hundreds of dollars. After investigation, we found that every part of the process of circulation should be part of the income: designers, manufacturers, brands, wholesalers and retailers.
get rid of most of the links? "I have been to the factory, understand the glasses production cost, but also what it costs did not reach the $700 price tag," Neal ·, co-founder of the company; Blumental (Neil Blumenthal) said. Inspired by the glasses found in his grandfather’s attic, the company’s founder sketched out the framework, hired a Chinese company to produce designer glasses, and began selling directly to consumers online. In this way, they get rid of most of the costs, each pair of glasses only to consumers charge $95.
Warby Parker story, just a large number of e-commerce companies trying to get rid of the intermediate links, direct docking with manufacturers, and then by virtue of preferential prices to build a microcosm of the brand. This is a bedding company (Crane and Canopy), there are office supplies company (Poppin), and the cosmetics company (Julep), science and technology parts company (Monoprice) Company (Beckett Simonon), men’s shoes and shaving tool company (Harry’s).
usually do this to consumers to bring cheaper goods, to bring higher profit margins.
get rid of intermediate links
large retailers discovered long ago that the control of the supply chain will help enhance their profit margins, a large number of own brand merchandise which is WAL-MART and health food supermarket sales companies such as Foods Whole. In the Messi department store (Macy’s) and Kohls Department (Kohl’s) market, its own brand to occupy nearly half of the sale of goods.
traditionally, start-up companies are often very difficult to do this, they do not have the brand awareness of large retailers, to persuade consumers to try their own brands, such as try Warby Par>