Consumers want instant access to goods and services. And for manufacturing brands, today’s Internet provides them with the ability to go direct-to-consumer (D2C), and skip the middleman altogether. The D2C model is when consumers connect directly to manufacturers to purchase a product. Consumers place orders directly through the platform, and the factory receives consumers’ personalized orders.

Going Consumer-to-Manufacturer has a multitude of benefits. Mainly, Consumer-to-Manufacturer is essentially evolving traditional manufacturing from an R&D and marketing-driven process into a consumer-driven process.

You gain the opportunity to engage directly with your consumers, get a better understanding of their needs, and deliver a tailored and personalized experience. Data allows manufacturers to understand consumer needs and preferences, enabling products to be developed in a much shorter time and significantly increasing efficiency within the production process. Reduced product lines, stronger economies of scale and a streamlined supply chain mean the end purchasing cost is decreased. Manufacturing enterprises can better realize product innovation and satisfy market demands, allowing them to offer a higher quality of products at lower price points. And by cutting out the middleman completely, you can provide competitive pricing and develop an innovative marketing strategy that could disrupt the big boys of any industry. The D2C model short-circuits all intermediate links, such as inventory, logistics, general sales, and distribution. Reduced product lines, stronger economies of scale and a streamlined supply chain mean the end purchasing cost is decreased. Manufacturing enterprises can better realize product innovation and satisfy market demands, allowing them to offer a higher quality of products at lower price points. When wholesale manufacturers sell through retail distributors, they have very little say on how the product is sold. They’re at the mercy of the distributor to ensure that the customer leaves the store (or the website) happy and satisfied. By selling directly to consumers, companies can envision how the customer journey should take place and execute the tactics required to make that vision a reality.

A major point of the D2C model is that it produces on demand. The user places an order first, and then the factory produces it. There is no inventory-sales ratio, which eliminates chronic inventory problems. The defining feature of a D2C model is highly competitive pricing brought about by connecting factories with consumer insights, such as preferences, location, and behaviors.

Companies like Timberland, REI and Under Armour are finding success expanding their Direct-To-Customer channels. It’s no wonder more brands plan to open their own retail shops and invest in their mobile and e-commerce sites. As more retailers aggressively pursue this strategy, the brands that can deliver the best experience—both to their customers and to their partners— are in a position to win.

Factory direct to consumer sales channels are exploding globally, particularly among Chinese manufacturers. This trend has been brewing over the last two decades, but it has reached critical mass now. Although estimates are inexact due to the lack of centralized tracking for new D2C merchants, most industry experts agree that marketplaces like Amazon are seeing 100-200% annual growth in D2C merchants, a growth rate well above other merchant categories. The opportunities and challenges factory direct sales present to the eCommerce industry are massive, and manufacturers, brands, 3PL providers, and agencies all need to be prepared.

Biyao is a good example of the D2C model in the Chinese ecommerce platform. This is the first application of the C2M model in China’s e-commerce. The platform claims to offer high-quality goods at low prices since it cuts out intermediaries, connecting customers directly with top manufacturers. The firm was founded by Bi Sheng in Zhuhai, a coastal city in Guangdong province and went online in July 2015. Bi is also one of the founding members of China’s largest search engine Baidu. In addition to various products including cosmetics, clothes and home appliances, Biyao also offers vegetables and fruits sourced directly from production sites.

Another good examples is Pinduoduo - the largest interactive e-commerce platform in China and in the world - that has implemented this model by helping brands and factories so that they in turn can produce products users need the most.

Moreover, JD.com has signed a partnership with South Korean manufacturer LG Electronics to sell RMB 5 billion ($707 million) worth of products on the e-commerce platform.Under the partnership, the two companies will cooperate in a range of areas, including product development under the C2M model, smart supply chain operations, marketing, offline expansion, and manufacturing of exclusive products.

In a companywide statement issued in April, Alibaba Chairman and CEO Daniel Zhang said the company would foster 10 digitized manufacturing clusters and help 1,000 factories generate over RMB100 million ($14 million) in sales. This goal would be achieved partly through the company’s consumer-to-manufacturer strategy, which taps digital resources such as data insights and AI algorithms to help factories operate more efficiently and serve consumers more effectively.

Still, there are obstacles to implementing D2C channels. Although China has invested heavily in infrastructure, certain factory locations still are not well integrated with worldwide transportation networks. There are the traditional border crossing hassles and fees, and the Trump administration’s calls for increased tariffs and other measures designed to reduce Chinese manufacturers’ competitive export advantage in U.S. markets give rise to concern for the future.

The rise of digitally native brands also presents an alternate market driven solution. Many eCommerce DNVB (digitally native vertical brand) sellers are opting to craft exclusive deals with factories, or to outright purchase manufacturing facilities to use for their brand. Moving forward, these kind of partnerships and acquisitions should increase as market players take advantage of the new dynamics created by logistics advances.

The trend towards Factory-to-Customer (F2C) selling is already impacting eCommerce, and it will only gain momentum as more and more Chinese manufacturers become aware of the trend and market structures. F2C is already pushing the ongoing revision of old supply chain principles, and it’s offering powerful opportunities for alignment and vertical integration. At the same time, it threatens business models that are too inflexible to adapt and lack protective moats. Regardless of where a manufacturer, agency, or brand is in relation to the trend, it’s definitely time to start implementing strategies that recognize that F2C is here to stay.