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Why sell direct-to-consumer?

The value behind the hype

Is it the next big thing or an overhyped distraction?

It's hard, but for some manufacturers it has changed their world.

Significantly higher margins, additional diverse revenue streams, control of consumer touchpoints, low-risk entry to new markets - these are attractive upsides for manufacturers starved of customer data and struggling to find margin-rich growth opportunities elsewhere.

So how can these upsides be realised without cannibalising existing revenue, massive upfront investment or risk to the brand?

Contents:

Authentic Revenue Growth


One common fear for manufacturers is the potential cannibalisation of their existing revenue streams by selling direct - but this doesn't have to be the case.

Research shows that over half of manufacturers see a positive impact on other sales channels as a result of selling direct to consumer, and more than 90% reported either positive or neutral outcomes in other sales channels. 

Plus, by selling directly, the manufacturer receives 100% of the margin earned.

Knowing the Customer


It might sound strange for manufacturers selling direct to see improved results in other channels too, but the science makes sense.

By selling directly to consumers, manufacturers are able to collect significant customer data and better understand the relationship between the customer and their products. That in turn can feed into better support for distributors and retailers, as well as improving the product itself, and the processes around product design and creation. 

Lifetime Value


Of course, the other essential benefit of capturing customer data is the ability to target them with relevant marketing and support messaging. 

Being able to identify returning customers and incentivise their spend to increase has clear benefits for their lifetime value. Having closer contact with customers gives manufacturers the potential to add more value, before and after purchase. 

Taking Control


Many manufacturers find that their products are being resold online by unauthorised or unknown retailers, who are not providing the quality of service that the brand deserves. 

This can be tricky to deal with, but by establishing an official presence on the problem channels, manufacturers retake control of their image and brand equity. Particularly on a channel such as Amazon, having a presence allows you to use their Brand Registry to control the sale of your products outside of your own account. 

Achieving the Benefits


Upskilling or hiring a team to manage the complexity of day-to-day ecommerce operations is a problem for many manufacturers.

However, by using a full DTC service such as Volo, manufacturers can realise the benefits of direct selling without the headaches of ecommerce.

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