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C2M Business model and Magento



Magento developers are turning towards a new business model that's emerging out of China. It is claimed it is emerging from China, but in fact, Dell Computers has been doing this for a while. Either way, it is becoming a significant business model that can enable small businesses all the way to large brands into a social media-led online shopping experience with an ERP system behind the eCommerce site with Graphic design giving options and customizations that the factory can offer.


What is C2M?


Consumer to Manufacturing (C2M) brings the manufacturer in direct contact with the consumer, where real-time inventory is produced for the sale of the goods sold. While China is boasting the transformations of their manufacturing plants in the fashion sector to be responding to the business model, the likes of Dell Computer has been doing this since the early '90s. There are key benefits in catching market trends as well as cash flow since the net-90 payment terms from retailers are shortened to net-30.


The Evolution of C2M


While the PC industry was driven by Dell's business model to be inherently more competitive by having both a better financial model as well as being more focused on the customer's needs. An online store can easily be used as a Conjoint Study for a particular configurable product - Magento has the variability to configure products with multiple options, and have the UX Design within the page layout to make choices. The Magento platform is ideal for C2M, with an ERP solution to manage channels and the demand, and configure to order. So how is China arriving at C2M?


Traditional Product to Market - A company designs a product, gets the product produced by sourcing it from a manufacturer, then gets placed into a store, then the consumer purchases it. The downside is inventory management as well did the consumers really like the product the way it was offered?


Customer-Centric Product to Market - Market research takes place, with focus groups and quantitative research to come up with products that are designed to meet demand and trends. This can be useful for globalizing products and bringing local configurations - regionalizing them so as to increase sales and profitability.


D2C Direct to Consumer - This model leverages the Customer-Centric model with the addition of no physical retail, but online ordering only. Dell Computer began in this space with their Direct model, where a customer would order their PC on the Dell website, and in a few days, it would be built and delivered at the customer's door. It is harder in two aspects to drive this model - consumers can't touch and feel the product easily since it is online-only, customer care is also in depots and requires to be mailed in.


C2M Consumer 2 Manufacturing - Here the customer and designers interact via social media to define the products, the variances in color, and features. This is now run by the manufacturer which then outputs the product straight to their eCommerce store for consumers to purchase. The downside is quality control given the time to market is at times done in haste, with the same issues of D2C.


C2M Magento Website


The architecture to execute this Manufacturing business model is pretty straightforward. You can have several eCommerce platforms all tied back in with an enterprise resource planning (ERP) system that collects all the channel sales, and coordinates inventory to all platforms. This allows small business owners to do boutique high-end merchandising at the same time as lower configurations of the same product with less expensive materials - differentiated by brand.


The bands can then have an IOS APP that ties into the eCommerce site, with the Magento API the development team would have no issue integrating the APP given that Magento is Open Source. Magento Experts can also build custom Magento extensions for further integrations with their raw material logistics by interacting with the ERP software that's collecting the orders from all the online shopping sites.


How do Consumers define their products?


Based on Social Media interactions in groups, or forums associated with the product category in which consumers are interested - Designers employed by the manufacturer can do surveys, organize a focus group to test out an idea or promote a set of brands. This vertical integration by the manufacturers skips the "middle man", however, it does put risk and interpretation of the market demand in the hands of "designers".


On the plus side, the feedback when properly filtered can execute a rapid prototype of the feedback from consumers within hours, which keeps the engagement, excitement and allows to propagate the product via social media trending. The power to customize and personalize your products is very powerful, only spending on what you value and not on a compromise.


C2M and Brands


Magento has the capability to handle multi-branded stores, each with its separate domains and back-end management. An ERP can consolidate additional channels like eBay, Amazon, Etsy, and the likes. With an IOS/Android App being paired with the brand, it is easy to deploy new products and their configurations in real-time. Website development can easily be managed with this infrastructure, and with social media, site offers are a great way to get further engagement and demand.


Conclusion


It isn't hard in today's eCommerce space to bridge the gap and go C2M with branded products that fit categories of the marketplace globally. The older ways of merchandising are being replaced by online social interactions that are meaningful to product definition, prototyping, and creation. If you would like to scope your C2M implementation, or have a discussion about a Magento store, feel free to reach out to us at wish@thegenielab.com

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