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Trade Suppliers Look at Likely Losses as Manufacturers Look to Sell Directly in 2011

According to the latest research by online selling analysts, about 27 percent of food and grocery manufacturers are considering building ecommerce stores to sell their products directly to their customers by bypassing trade suppliers.

A few major companies in the US have already launched their online stores to understand the online purchasing habits of their customers better and improve their marketing strategies. They believe that they would attract a better customer base if they sell directly through their ecommerce sites without involving trade suppliers.

There are a few companies that have turned to social networking sites for their brand building exercise and to establish a direct communication channel with ‘fans’. The opportunities to tap a greater market continue to grow for manufacturers and retailers.

Research indicates that 43 percent of major brand owners expect 10 percent of their total revenue to come from online sales by 2015. In the present market, only 18 percent of manufacturers manage to reach this figure. Online grocery shopping is expected to be a $ 10 billion market accounting for about 5.5 percent of sales.

Online buyers believe that buying online is a green way of shopping as they do not spend gas going to the supermarkets nor do they contribute to the emission. Apart from the green element, convenience is another huge factor in swinging the shopping habits of consumers from traditional shops to online stores.

Grocery is one of the fastest growing categories in online selling. However, delivery charges and reliable delivery slots are likely to pose some serious problems. They are likely to become the biggest barriers to customers using online services for their monthly grocery shopping.

Analysts predict a strong growth for online grocery selling despite the obvious blocks in the path. Trade suppliers are hoping that they will not lose much of their revenue earned through grocery sales if manufacturers decide to go direct in a big way.

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