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Why Sell Direct-to-Consumer?

The value behind the hype

You've heard about it, read about it, seen competitors and similar businesses try it, and perhaps even tried it.

Unless the business already has some retail capability, adding a direct-to-consumer channel can be a tough proposition for manufacturers of all sizes.

So, why do it?

Well, some manufacturers are discovering the potential of online retail and the power of selling direct-to-consumer.

 It has better margins, opens additional revenue streams and gets them access to customer insight that they've never had before.

This is part of our series on the Direct to Consumer phenomenon - check out the main page here for much more.

Demand

Understanding demand across channels and geographies is the key to starting your direct selling approach.

Execute

Jump onto relevant channels, understand their unique aspects and get your product online for shoppers to buy.

Optimise

Always be moving - marketplaces especially require constant maintenance and work to stay on top.

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. 

Delivering for customers

Fulfilment is a vital part of the customer experience when it comes to online shopping. It's also often a problem topic for manufacturers considering DTC. Most simply aren't tooled up to deal with consumer orders. 

However, this isn't as much of a stumbling block as it might appear. There are quality solution providers who can outsource this workload by taking delivery of pallet loads of products and processing orders on the manufacturer's behalf.

Minimal process change

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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