Manufacturing & D2C Ecommerce: Cutting Out the Middleman

The question of how to leverage ecommerce continues to be a topic of much discussion and debate among manufacturers. With global supply chains and distribution channels thrown into chaos by COVID-19, many companies have struggled to get their products and information out to end-user customers. Even during a crisis or a time of great uncertainty, business doesn’t stop being business. Companies still need to improve their profit margins, serve customers well, and grow sales. The once-trusty middleman-centric model now often makes it harder to solve and respond to your end-users’ problems. For many manufacturers, direct-to-consumer (D2C) ecommerce offers a solution.

In today’s society, no matter who you are or who you are selling to, ecommerce is becoming a preferred method for purchasing and selling products. Ecommerce is the process of buying and selling goods and services through the internet and mobile applications. Ecommerce includes both online retail and online payments and other electronic transactions such as online payments.

Business-to-business (B2B) ecommerce involves one business selling to another business online. A manufacturer selling to a wholesale distributor or that distributor selling to a retailer would be considered B2B ecommerce.

In business-to-consumer (B2C) ecommerce, a business sells products to a consumer buyer online. If you have ever made a retail purchase online, you have participated in B2C ecommerce.

Direct-to-consumer (D2C) ecommerce is a specific B2C business model in which a manufacturer sells its products directly to consumer buyers online, bypassing any third-party distributors, wholesalers, retailers, or other middlemen.

It is not uncommon for a company to have a hybrid business model that combines elements of both B2B and B2C/D2C ecommerce. Many of our ecommerce clients follow a hybrid retail/wholesale ecommerce strategy.

There’s no doubt that the Internet notably changed the retail world at the turn of the century, and it continues to do so in the modern era. The industry is continuously evolving, changing how we shop and conduct business as a whole. Manufacturers are progressively skipping the wholesaler’s role and instead selling straight to their consumers with ecommerce. This is possible because advancements in technology have greatly decreased the need for a middleman in marketing.

Thanks to modern web, mobile, email, and social technologies, direct digital marketing is easier than ever for all types of businesses. Instead of relying on the channel to generate demand and drive sales, manufacturers can utilize direct digital marketing tactics to easily reach their target audience themselves online. Direct digital marketing includes using tactics like email, SMS/text messaging, mobile apps, retargeting, and remarketing to send advertisements, display information about products and services, and send other forms of communications to a targeted audience without relying on a middleman. Direct digital marketing has many benefits for businesses. It is efficient and fast, and it’s easy to track and assess the effectiveness of your activities.

There are many benefits to manufacturers who use ecommerce to sell their products directly to end-user customers. Through ecommerce and direct marketing, manufacturers can reach a bigger audience online and grow their market share. Most importantly, it’s their market share, not their distributor’s!

D2C ecommerce also allows companies to focus on the user without a buffer in between, creating a more personalized experience, and building trust and loyalty to the brand. Here’s a perfect example:

In 2017, Nike started to focus on conducting business directly with consumers, and essentially cut out the middleman. Nike reported that their website sales grew 19 percent, while their retail sales only saw a 5 percent increase in same-store sales (Bloomberg). The CEO of Nike, Mark Parker, explained that they wanted to make customers’ shopping experience more personal (Bloomberg).

Nike’s story touches on the greatest benefit of having a D2C ecommerce strategy. With D2C, manufacturers take full control of their entire process and customer experience, from manufacturing to marketing to sales to support and even reputation management. This gives them the means to create an omnichannel experience for their customers. With omnichannel, merchants can offer their products on many different buying channels such as social media, online marketplaces, or their own websites, with a seamless and consistent customer experience no matter where the purchase is made.

A good place for your manufacturing business to start cutting out the middleman is by building your own D2C ecommerce website – or partner up with an experienced ecommerce agency like Blayzer Digital in St. Louis to build it for you. We have successfully partnered with many, many manufacturers on their ecommerce projects over the years, including straight B2B, B2C, D2C, and hybrid business models. We will start by consulting on your overall digital strategy and architect a custom ecommerce solution that properly integrates all your data and marketing efforts. If you’re ready to break free from the middleman and grow your own way, give Blayzer a call today!