When entrepreneurs start businesses, one thing they debate is whether their operations will use direct to consumer sales. Just as the term sounds, direct-to-consumer means that the business sells right to the end customers. That is different from most businesses that tend to go with distributors. However, D2C is on the rise.
Is Direct To Consumer Sales Right for Your Business?
1. Your Business Has a Strong Online Presence
Businesses that engage in robust online marketing efforts and lead with a digital-first approach are well positioned to succeed with direct to consumer sales.If you do not know a lot about online marketing, you need to learn or work with people who do. For example, Benjamin Naderi offers resources on starting a blog (a great way to reach potential customers), pricing optimization, and business consulting, among other services.
2. Your Products and Brand Are Strong and Authentic
As Bernard Marr reports in Forbes, even mattresses have become a popular direct-to-consumer item. Companies such as Eve Sleep feature 100-night trials and multiple mattresses delivered to your home. This company was created with D2C in mind from the beginning.
Bombas (socks, underwear, clothes), AdoreMe (extended-size underwear), and Estrid (affordable razor blades) are other brands that stand out for being authentic and unique. In many cases, a direct to consumer sales business starts out selling just one product that follows a clear vision.
3. Your Business Has Maximized Manufacturing Efficiency
Manufacturing efficiency occurs when you make products with the lowest total cost possible. Materials, time, and energy wasted are all at a minimum. When a business achieves this standard, D2C is a logical next step. Manufacturers can have more direct relationships with their customers rather than have to depend on distributors and retailers. They can test products more responsively and bring products to the market faster.
4. You Understand the Pros and Cons of D2C
The pros of direct to consumer sales include reduced costs and more profit. Your business does not need to talk or negotiate with department stores, chain stores, and other retailers. It can be extremely difficult for startup entrepreneurs to get their products in a store. Another major advantage is the control you have over your product image and the customer experience. Direct sales also mean more direct access to customer data.
On the downside, you must establish a vibrant online presence, which some businesses find difficult. If your business is established, going D2C could alienate some of your middlemen.
You also need to figure out how to handle product returns and customer service. These two areas are pitfalls for some online businesses. Multi-tasking is also essential for D2C. Your business is responsible for manufacturing, sales, accounting, marketing, website maintenance, social media, and everything else. However, you can work with various channels or partners so as not to get overwhelmed.
Decide Whether Direct To Consumer Sales Fits Your Business
You are far from alone if you go the direct to consumer sales route. The consumer interest is there, but your business must have top-quality marketing and brand strategies to succeed. Get in touch with Benjamin Naderi to talk about the online potential of your company.