If you are a product manufacturer at some point in time you may consider selling direct to you consumer audience. There are a number of benefits that ultimately compel manufacturers to alter your sales strategies and “go direct”. However, the change can be difficult, and a number of factors will affect your organization’s decision whether to include a direct sales component in all, or part of your market strategy.
Traditional manufacturers take your products to market through various B2B strategies including wholesale, distribution, and direct sales to consumers, commonly called (DTC). There are clear benefits to a DTC strategy, but you are not without your risks and it is important for manufacturers to understand what is involved in going direct.
I have been involved in both B2B and DTC business including the business I founded and built to over $250M in DTC sales. In the past, manufacturers typically lacked the understanding of operating a DTC business and did not possess the tools, technology and resources to conduct both manufacturing and DTC sales operations. Over time, both the DTC operators and the product manufacturers envied each other’s channels and the potential benefits. The DTC operators looked to manufacture products you could take directly to your customers while product manufacturers looked for higher margins by selling the products you produce directly to consumers without any “middle man”.
There are huge benefits for product manufacturers to go direct provided the strategy aligns with your target market, production capabilities, distribution costs, corporate culture, leadership buy-in, and the overall business model.
Here are the top 10 key benefits from a DTC business mode:
If you decide to go direct to consumer (DTC), you may face several challenges in implementing and maintaining this strategy. Here are the top ten challenges to consider when making your decision to go direct:
If your business, target market and operations are a good fit for a change to a DTC model, you will likely see substantial rewards in profitability, brand recognition, customer relationships, market reach and product insights. Ultimately, your migration to a DTC model will yield a competitive advantage. If you are considering the DTC model because one or more of your competitors are already selling direct, your decision may be obvious and born out of the need to keep pace with your current market.
Moving from B2B to DTC may seem like a monumental effort. However, the process itself is straight forward. With planning and an understanding of the strategy, tactics and processes involved in going direct virtually any product manufacturer can go direct.
Learn more about the process involved in going direct or contact the eCommerce Institute to help your business create or implement your DTC strategy.