Disintermediation in Online Commerce: Barewalls.com Business Plan Excerpt
The traditional supply chain consists of the raw materials supplier, the manufacturer, the distributor, the retailer, and the end consumer. The traditional flow of commerce through the supply chain looks something like this:
Electronic commerce is changing this linear view of the supply chain. Instead of goods flowing from one participant to the next, this new online marketplace allows each participant the opportunity to reduce costs by bypassing some of the other participants. However, risks are still posed for each participant, who may find himself being bypassed.
The new supply chain is no longer pictured as an orderly procession from raw materials supplier to manufacturer to distributor to retailer to consumer. Rather, the new supply chain shows each participant scrambling to be the connection to the party who pays for it all – the consumer.
– excerpt from the UPS “Guide to E-Commerce”
The above diagram illustrates the basic relationship between companies in an industry that is entering the age of e-commerce. In the art print industry (which is in itself very young and is still developing), the term “raw materials supplier” would be analogous to the artists who create the source images.** The “manufacturers” of this industry are the art print publishers, and the “distributors” are the wholesale consolidators who stock multiple publishers and who offer no-minimum one-stop wholesale ordering for retail businesses. Finally, the retailers include frame shops, poster stores, furniture stores, department stores, book and museum shops, art and antique stores, art supply stores, and other places where consumers find and purchase a variety of art print products.
Within the above definition of the art print industry, there is a broad spectrum of commercial activity which often blurs the distinction between artist, publisher, distributor and retailer. Even before the advent of electronic commerce there were many artists who did their own publishing, distribution or retailing. Similarly, most of the larger art print publishers currently also act as distributors of prints which are manufactured by other publishers. This helps the larger publishers create more comprehensive portfolios of products and encourages the retail store owners to bypass the wholesale distributors and buy “directly” from that publisher.
One of the biggest potential changes that could affect the flow of commerce in this industry (aside from the Internet) is the increasing availability of inexpensive and high quality digital printing processes. The implications of that technology are not certain, although it points towards an increasing trend towards the reduction of physical inventory being held by any one party. Given this uncertainty, and given the fact that this industry, in the words of the largest wholesaler, “only really started 20 years ago,” the question is: Where does Barewalls fit in to all this?
The answer to this question can be summarized as follows:
The goal of Barewalls is to position itself as the closest link to the consumer, and to control the flow of communication between the consumer and the producer, whoever the actual producer may be.