Business

What Should Manufacturers Consider When Adopting a D2C Model?

More and more manufacturers adopt the direct-to-consumer model, also known as D2C or DTC. This model implies that manufacturers bypass the middlemen and reach their customers directly, offering products at affordable prices. They mainly use online channels such as their own e-commerce websites or marketplaces, like Amazon or Etsy.

D2C ecommerce empowers entrepreneurs to increase brand awareness, connect with their customers, build credibility, establish trust, and meet the modern customer’s demands. Nowadays, people want to buy from sustainable brands that make an effort to care for the environment. On top of that people expect to have the option to personalize products according to their needs. And lastly, they want fast shipping and same-day or next-day delivery. Manufacturers who manage to meet these expectations see profits rise and their businesses grow.

It’s easy to see why this model has gained popularity over the years. However, it doesn’t come without challenges. Here are the top 5 things to consider when going D2C.

1. Potential conflicts with B2B partners

Make sure to communicate your intentions to incorporate D2C sales into your strategy to your existing B2B partners. It pays off to be transparent and keep good relationships, especially if you intend to continue selling B2B alongside D2C. Think about potential disagreements and try to plan ahead with conflict resolution.

2. Put your customers first

Happy customers with good experiences ensure brand loyalty. Focus on providing a great customer journey, solving their problems, and making it easy for them to buy your products. Communicate with your customers on a personal level and on a regular basis. Make sure to listen to their feedback and use it to improve your product offering.

3. Reimagine your manufacturing operations

Selling D2C is a lot different than selling to retailers. You might have to outsource part of your supply to be able to handle individual orders or update your existing infrastructure by working with third-party fulfillment partners. Make use of smart technologies, such as manufacturing software, to manage your business operations, multiple sales channels, and inventory from raw materials to finished goods, across multiple warehouses.

4. Offer personalization options

Those who purchase from D2C brands expect not only a personalized customer experience, but also the possibility to customize products according to their needs. For example, jewelry makers might offer the possibility to engrave one’s name on the items. Offering this option gives you a clear competitive advantage and puts you at the forefront of the manufacturing D2C landscape.

5. Analyze your performance

Adopting the direct-to-consumer strategy is an investment as it requires technology, resources, and time. But how do you measure its success? It’s important to have a clear vision and set clear KPIs (key-performance indicators), such as loyalty, repeat purchases, or customer satisfaction levels. Of course, these indicators should be aligned with your company level objectives, related to increased profitability or sustainability.

Although challenging, the D2C model is certainly appealing to modern manufacturers today. If implemented and monitored correctly, with the use of smart technology and stakeholder involvement, it can be a great way to scale a business. 

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