Pricer’s Points: eCommerce & Pricing: Threat or Opportunity? | Thomas Igou

I had the fantastic opportunity to moderate a roundtable discussion on the topic at the 6th Annual Manufacturing Pricing Excellence in Milan and listen to different viewpoints. The one common thread among all pricing leaders in the face of the growth of ecommerce: “we cannot lose control of our prices.” There was no common thread, however, on how to go about it exactly.

If threatened by an enemy, there are always two options: beat them, or join them. It seems that for manufacturers that have already entered the digital sphere, the same rule applies with ecommerce. One participant had confided taking volumes on Alibaba to see how it works and test the waters; another had explained having entered in a pilot with Amazon to set prices; others were setting up their own ecommerce platforms to compete directly with the likes of Amazon and Alibaba.

There were some still skeptical about getting into the ecommerce game at all. One participant feared that if he started an ecommerce platform, that would create a big conflict with his distributors, who would then run away to his competitors. But another participant challenged him to consider, then, if he actually needed distributors at all? Disintermediation, or the disappearance of the middlemen in a value chain, is a growing trend; ecommerce is making that even more transparent. If you can sell directly to your end users, do you still need the same set up of distributors, resellers, garages etc…?

Another participant said his business absolutely needed distributors, because another aspect of ecommerce is that distributors themselves can get into the game, and what he’s seen in his industry is that distributors from different regions are now competing against each other (not necessarily on purpose) because of ecommerce. Digital has no physical barriers.

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eCommerce & Pricing: Threat or Opportunity? | Thomas Igou | Pulse | LinkedIn.

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