Are you dabbling in the idea of engaging in D2C eCommerce? Cutting out the middleman is what many manufacturers have decided to do and it has made their business more profitable along the way.
There are so many reasons to start a D2C eCommerce website, but there is a lot you’ll need to prepare yourself for before you start. Here is everything you need to know about D2C eCommerce before jumping into the deep end!
What Is D2C eCommerce?
D2C eCommerce stands for direct-to-customer, and it refers to the process of manufacturers selling their product directly to the customer (and cutting out the middleman) through the use of an eCommerce platform.
The D2C business model cuts out retailers and resellers from the equation, so manufacturers can sell their products at full price rather than having to sell them at a bulk-buyers discount to retailers.
There are many things about this business model that are attractive. Are you ready to find out why D2C just might be the future of eCommerce?
Why Is A Direct To Consumer Strategy Important For The Future?
Customers want convenience and online shopping has presented a new way for customers to enjoy convenience, with shipments arriving right to their doorstep. Brands can now focus on direct-to-customer sales with the ease of an eCommerce platform such as the one that commercebuild supplies for Sage X3, Sage 300 and Microsoft Dynamics 365 Business Central ERP businesses.
D2C allows the manufacturer to sell directly to their target audience with a higher margin, rather than selling large amounts of stock to retailers and resellers who will add their own profit margin to the product.
What Are The Benefits Of D2C eCommerce?
The D2C business model is easy for brands that are already established. When customers know your brand, it is a natural instinct for them to go directly to your website to buy a product rather than to a retailer. This is how brands like Nike have made the transition so easily.
But not all wholesale B2B brands make the transition to D2C that easily. If your brand is not that well known, you will need a killer advertising and marketing strategy to run a successful D2C eCommerce store. The good news is that it doesn’t need to be all or nothing.
Just like Nike, you can engage in both B2B and D2C. How? Well, you can offer the opportunity for customers to buy directly from your website, but also sell to retailers, making the best of both worlds.
Improved Brand And Customer Experience
When a brand is able to own the entire consumer experience from start to finish, it can optimize it to ensure that its customers are not only satisfied but blown away. The problem with B2B wholesale is that you (as the manufacturer) are not actually engaged with the customer at all, instead, there are retailers and resellers that have total control over the customer experience which can impact your brand positively but also negatively without you knowing it.
If you decide to also include D2C eCommerce, you can tailor the customer experience to be in line with your branding and business ethos.
You can adapt the experience customers are having on your website to be as easy and seamless as possible. This way, you’ll have customers coming back time and time again.
Direct Brand Relationship
Instead of customers building a relationship with retailers or resellers that stock your product, the customer will develop a direct relationship with your brand. This is ideal because no negative actions of a retailer or resellers can affect whether or not the customer wants to buy from you again.
Building a direct relationship and trust with your customers is the key to creating a healthy D2C eCommerce business model.
Owning Data And Insights
In recent years, we have come to realize that there is nothing quite as valuable as data. As a brand, having access to customer data is key to remarketing and even creating a strategy that targets your main target audience.
When customers buy your products directly from your website, you gain valuable insights about your users, including (but not limited to):
- Device used
- Email address
- Phone number (possibly)
- Communication preference
These are all very valuable metrics to have as it means you can remarket directly to these customers OR to customers that fit into the same demographic. You can also email these customers at a later stage asking them to fill out a survey which can help you to further improve your customer experience.
Sales are dropping in physical stores and retailers are taking a huge knock. But this also affects brands that need to have their products sold. D2C is the answer to this problem, as having a solid D2C strategy can make up for the sales lost in retail stores.
This provides brands and manufacturers with a level of sales protection. Although their businesses still might take a knock during recessions or unlikely events like the pandemic, they will be safer for having a D2C store that can continuously bring in sales from those who can still afford to buy your product.
Increased Number Of Sales
If your business is using both the B2B and D2C business model, you can increase your sales exponentially. You will still be making your sales to wholesalers and retailers, but you will also be making sales through your D2C eCommerce platform and thus gaining back control over your brand.
The use of a great marketing strategy should increase the number of sales you are making on a monthly basis. Because D2C can also be a far more profitable business model (because profit margins are higher), you will not only increase business revenue but profitability too.
If you bypass the process of selling to wholesalers and retailers and instead sell directly to the customer, your business can increase profit margins by a significant amount. Most businesses that switch from a B2B to a D2C business model, save 10 – 15% during the wholesale process, and 15 – 40% from retailers.
This will depend on the profit margins of your product, but by switching from B2B to D2C your business could increase its bottom line by 10 – 55%. Now that’s some life-changing savings happening right there. This could be your sign to make the switch to a D2C business model. If you would like commercebuild to help make that transition, book a demo of our platform to get started.
Speed To Market
Using the D2C eCommerce business model means that your speed to market is much faster than when using wholesalers and retailers. This is because once a product has been manufactured, it can be launched on your website and be immediately available for purchase by the customer.
This is something that would be a lot trickier when using wholesalers and retailers, as you would need to market it to those businesses, and possibly demo your product for them before they would make a purchase. They would then need to do marketing before the product was released to customers.
Using the D2C eCommerce business model means that you can release a product to customers immediately, and receive feedback as soon as possible. You can then make improvements and adjustments to the product far quicker than you would be able to by using wholesalers and retailers.
Full Product Range
When your brand uses the D2C business model, you can offer customers all of your products available in one place. This is something that you would never find in retail stores. If we take Nike for example, their D2C website lists an impressive 5,700 products.
In contrast with their biggest retailer in the UK, JD Sports, which lists 1,700 Nike products. Although JD Sports has a massive Nike offering, it is not nearly as all-encompassing as that of the Nike eCommerce store itself with its extensive product catalog.
Dedicated Shopping Environments
Brands like to create an immersive experience for their customers, and will often have requirements of their retailers. They need certain shopping experiences to be created when their products are stocked in a store (or online store).
But at the end of the day, the experience created is never quite as immersive as when you visit a store that belongs to the brand itself. Having a D2C eCommerce store allows you to tailor-make the shopping experience for your customers so that it’s one to be remembered.
How To Adapt To D2C
As you can see, there are many upsides to switching to a D2C eCommerce business model or at least providing customers with the option to shop directly from you as the manufacturer. It might take some time to prepare the way for your new D2C business model, but once all the pieces fit into place, your business can run like a well-oiled machine.
Here’s exactly how you can start prepping to switch to a D2C business model.
Make Sure That Your Company Is Ready For The D2C Switch
Apart from preparing your staff and partners for the change in business strategy that is about to be made, you will need to prepare the following:
- You will need to adapt your business plan to shift your business into the D2C eCommerce business space. This will include a change in marketing strategy as your target audience will not be wholesalers or retailers but rather the customers themselves.
- Get your operational systems prepared for the influx of traffic and orders. While your being prepared for B2B eCommerce may set you in good stead to start the transition to D2C, there are changes that will need to be made in many marketing tactics and possibly functionalities. Make sure that all of this is sorted before launching your D2C. If you need help with this, reach out to us for help with your D2C platform.
- Your marketing strategy needs to be developed for this new style of business operations. You should create a marketing strategy that informs potential customers about the new strategy planned for your brand in the run-up to your launch so that you can enjoy a successful D2C eCommerce business from the get-go.
Prepare Your Partners & Staff
You cannot simply launch into a D2C business model without preparation, consideration, and giving notice to both your staff and your business partners. You don’t just want to fill them in on what is going to take place, but actually, get them on board so that your teams are working together cohesively to make this new era in the life of your business a success.
The switch may cause a couple of people within your business to take on roles and responsibilities that they didn’t have before. This should be something outlined before the switch is made.
Training or workshops can help your staff to make the transition a little easier for everyone involved in the day-to-day running of your business.
Your Guide To D2C eCommerce
D2C eCommerce provides manufacturers with the ability to grow their business exponentially, cutting out the middleman and increasing their profit margins by 10 – 55%. If this is a switch that you have been considering for some time, then it just might be time to finally make the change, your business will thank you.
With so many benefits that come with a D2C business model, it’s hard to imagine businesses operating any other way in the future. If your business is using Sage 300, Sage X3 or Microsoft Dynamics 365 Business Central ERPs, commercebuild can build a ERP-driven B2B and B2C eCommerce webstore or Customer Portal.
Contact us to get the process started.
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If your business is using Sage 300, Sage X3 or Microsoft Dynamics 365 Business Central ERPs, commercebuild can build a ERP-driven B2B and B2C eCommerce webstore or Customer Portal.