Analysis shows increase in online selling for manfacturers

In an effort to keep up with the Top 500 web-only businesses,
consumer brand manufacturers are turning to online selling to stay in
the more lucrative e-commerce game.

Amazon.com leads the list of the Top 500 web-only merchants with
52.2% of all web sales. The online retail giant increased their sales
from $12.1 billion in 2007 to $14 billion in 2008. If you take
Amazon.com out of the equation, manufacturers stand to gain the most as
one of the fastest-growing groups in Internet Retailer’s Top
500 Guide.

In the past, most manufacturers have been hesitant to create an
online store that would sell directly to consumers. One cited reason was
that is might upset or weaken their relationships with distributors and
traditional retailers. According to industry analysts, larger chain
stores such as Wal-Mart Stores, Inc, and Best Buy are able to better
negotiate inventory and pricing with manufacturers through purchasing
power. Retailers such as J.C. Penny have focused on producing their own
private label brands. This presents a larger threat to consumer brand
manufacturers that can be leveraged by selling directly to consumers
online. Apple Inc. (number 5 on the list) grew their web sales to $39.4
million in 2008, an increase of over 55%. Brand manufacturers such as:
American Apparel, Vera Bradley and Jones also increased their revenues
through online transactions.

This trend also creates opportunities and advantages for online
merchants seeking a simpler and more streamlined approach to
fulfillment. “We are continuing to develop tools and technology that is
targeted to the online retail industry,” says SBC Fulfillment President,
Brian Schoenbaechler. The ecommerce fulfillment company, launched two connectors last year that
allow companies using AbleCommerce
and Magento
e-commerce software to directly tie into their warehousing, packaging,
shipping and fulfillment services. “ The future of the retail industry
is dependent on e-commerce, and we want to be a part of this ongoing
growth.”