Now there’s a whole new generation of e-commerce players. Ever heard of Nasty Gal, Warby Parker, Indochino, Stella Dot, Chloe & Isabel, Frank & Oak, Julep, Beachmint, Shoedazzle, ModCloth, Everlane, Bonobos or J Hilburn? Together, this group of companies will generate over a billion dollars in revenue in 2012.

These web-only brands are vertically integrating the retail value chain, including manufacturing, branding, and distribution. By eliminating stores from the supply chain, these companies bring products directly to consumers from the factory without the bloat of the traditional retailer. This translates into high-quality products (whether eyeglasses or t-shirts) at significantly lower prices.

Here are three reasons why vertically integrated commerce is an attractive retail model.