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Meet the New Kid in Town: Direct to Consumers (D2C)

18Oct, 2021
Meet the New Kid in Town Direct to Consumers (D2C)

Just when you thought the ecommerce platforms are too busy to jump in, there’s a new trend in commerce. The lines between B2B and B2C are shifting. Manufacturers selling direct to consumers are catching on. Online sellers are discovering that D2C can be profitable and strengthen control of your brand. Here is more information to help you decide if this is the right move for your brand or products.

The Emergence and Benefits of D2C

Thanks to the popularity of online shopping, manufacturers selling direct no longer require a massive capital investment in Brick and Mortar stores and additional team members. Ecommerce also opened new channels of distribution and the marketplace continues to evolve. D2C is becoming the norm and if manufacturers want to stay relevant, they must follow the trends of their customers. There are many benefits of direct selling to consumers.

  • Time to market is significantly decreased. D2C sellers can skip the long traditional retail sales cycle that requires locked-in product development well in advance of order and delivery. They can have more agility and prototype, test and move to market quickly.
  • Brand control. Brand image will not be subject to distortion by retailers or wholesalers. Many consumers like it when they can deal directly with a brand. They feel like they are getting insider information or products.
  • Price control. Direct selling allows sellers to further reinforce MSRP (manufacturer’s suggested retail price) and communicate directly with consumers about price points.
  • Better customer data. Selling direct allows sellers to garner valuable customer data directly, literally. This leads to better promotions, products, relationships and an increase in sales.

Mitigating the Risks

A potential risk is damage to existing relationships. Retailers and wholesalers will now view the manufacturer as competition for the brand. This is where transparency is the key. D2C sellers need to communicate their plans before they are implemented. They should also remind retailers and wholesalers that many consumers will continue to demand access to multiple brands, something they cannot provide. One good way D2C can provide consumer satisfaction is to offer exclusive products to their wholesale and retail channels. This can be one product in a size, color, etc. that you will not sell directly.

An area a manufacturer may face challenges with is understanding retail sales and customer expectations. Shipping and customer service should be in place to support direct sales to avoid damage to their brand. Features such as chat and click should be included on your website design and your social media presence should be responsive and updated consistently with new and relevant brand information.

Making the Move to D2C Sales

If you are an online seller that is ready to step into D2C, you will need to choose the platform that is operations capable to support both all your sales channels, including B2B and B2C. You will also need to determine if you want to limit sales to one channel or take advantage of all three:

  • B2C Website
  • Marketplaces
  • Amazon

You will also need to consider logistics such as order fulfilment and tracking, customer service management, sales and marketing activities tracking and last but not least, payment security. Depending on your volume and quantity, you may want to enlist the aid of a third-party fulfilment provider to help you meet the demands of your D2C sales and returns.

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