Direct Channels of Distribution and Third-Party Fulfillment
Whether you are an ecommerce seller or a direct sales associate, there are many benefits exist by using a direct channel of distribution to get your product to the consumer. As more brands are considering Direct-to-Consumer (D2C) sales, they are looking for ways to compete against sellers who use indirect channel distribution.
In a Direct Marketing Channel the product or service goes direct from the manufacturer to the end consumer. In an Indirect Marketing Channel, there is at least one intermediary such as a retailer or wholesaler, or maybe both.
While there some advantages to a direct channel distribution, there are some challenges. Fortunately, third-party fulfillment providers can help sellers who are planning to sell directly to their customers.
Advantages of Direct Channels of Distribution
Many customers appreciate the opportunity to deal directly with the manufacturers of a product. Regardless of the product that you are selling, your customers will appreciate giving you the profits directly. Direct-to-Consumer sales gives customers the opportunity to be more familiar with your product and brand. This can lead to customer loyalty. This is probably one of the reasons that companies such as Avon has been able to survive against other brands selling online. In the end, consumers are still interested in a personalized shopping experience.
By selling online, you are connected to consumers all over the world, and you can also keep your overhead low. With no middlemen like with most businesses, you get to enjoy higher profit margins on your products. With direct marketing online, you can easily provide your customers with a convenient solution that’s available 24 hours that will help create transparency.
How 3PLs are Helping
With the good, comes the bad. Before you use direct channels of distribution for your products, you need to consider some of the disadvantages and how to counter them. Using a direct channel of distribution does not give you access to extensive global networks that involve numerous wholesalers and retailers. It can be difficult for a direct distribution channel to compete with such an extensive network. But that is changing. What used to be out of reach for direct sellers, is now available through third-party partners. You can now easily sell as much of your product on your own, due to the large distribution networks that many 3PLs are a part of with an added benefit of reduced shipping costs.
With online sales consistently increasing, the options have also expanded. The emerging trend of Direct-to-Consumer sales is catching the interest of some brands. Because of this, there is definitely a place for 3PLs to provide fulfillment to help a brand create customer loyalty by providing excellent delivery of a product.