B2B to D2C: How wholesalers are cutting out the B2C middle-man

It has been a few years in the making, but now more than ever D2C is no longer the exclusive domain of traditional B2C brands. Many wholesale B2B retailers are now utilising ecommerce to sell directly to sell to individual consumers.

If, as a wholesale B2B retailer, you’ve been considering selling within this new channel and you’re wondering how to utilise it, or where exactly to start, then we’ve got the lowdown to aid your newfound ecommerce strategy.

From B2B to D2C: Why manufacturers are selling direct-to-consumer

The D2C ecommerce market is thriving in the aftermath of the pandemic, despite the resurgence of bricks & mortar stores. Consumers reaped the benefits of digital retail innovation, becoming adjusted to receiving their favourite products directly to their door, with reduced overheads at cheaper price points (especially from the likes of Amazon brands), and now with the added convenience of same day delivery, BOPIS, and BNPL services.

In the meantime, traditional wholesalers were experiencing huge supply and demand issues, and an uncertainty of their purpose in the market following the lengthy decrease in bricks & mortar footfall.

Now, there is a considerable increase in the number of manufacturers adapting to the aforementioned commercial challenges; cutting out the middleman, bypassing B2B and selling directly to consumer, or making the transition from wholesale to direct-to-consumer entirely.

The realisation that there’s enough interest from frontend consumers that’s worth devising a new ecommerce sales strategy to sell to is becoming more commonplace, and suddenly B2C retailers are facing new competition from those wholesale suppliers.

In 2022, it’s never been easier for B2B wholesalers to join the party; the latest innovations in ecommerce and fulfilment services are at the disposal of D2C sales strategies.

Let’s explore some of the benefits of a D2C strategy that B2B wholesalers can undertake if they’re considering the transition.

The benefits of Ecommerce D2C Strategy

Implementing a D2C ecommerce strategy allows manufacturers to sell directly to frontend consumers through digital mediums, effectively cutting out the ‘retail middleman’, which can result in lower distribution costs.

D2C storefronts have the propensity to grant full control over their customer experience.

They facilitate increased customer-centricity and can provide retailers with an extensive perspective of their business, including key insights into merchandising and invaluable customer data, including:

• Most frequently searched products

• What products are struggling to sell

• Demographics

• Purchase frequency

• Average order values

• Social media habits

• Personal preferences

These customer behaviour insights will help identify up-sell or cross-sell opportunities more frequently and deliver tailor-made content and a hugely engaging user experience at every touchpoint.

Successful D2C ecommerce strategies will ultimately experience growth in their topline revenue. This allows businesses the freedom to invest increased (or indeed, freed-up) revenue on brand advertising & marketing that can drive an increase in sales.

Build brand loyalty and become more competitive by bringing new products and services to market quickly to meet the demands of the modern consumer.

Investing in your marketing & social media teams to reach and learn about your new audience, experiment with creative content and encourage users to do the same. Venturing into a D2C market will throw up a heap of new challenges, especially now you’re marketing your brand to the frontend consumer.

However, it is important to devise a significant risk management plan before any transition is made. Making the shift to D2C won’t be as easy or viable in some industries.

There are manufacturers that have been hesitant about whether D2C would work for them and rightly so. Consumer packaged goods (CPG) companies trading lower-margin household items had warranted concerns about potential channel conflict.

Heavy industry businesses have also been wary, having traditionally depended on personal relationships in their sales channel and with direct sales partners.

While many businesses have been conducted in the same way for years or even decades, early D2C adopters have experienced success and overcome resistance.

In a rapidly-evolving marketplace with the consumers in control, the pressures now faced by manufacturers are making even the most steadfast wholesalers consider adopting a D2C strategy.

Transitioning your business to D2C

Those still with reservations such like conflicting with retail sales and losing the support of loyal distribution partners should focus on the potential outcome that your retail partners might actually align themselves with your new D2C strategy if it’s executed correctly.

Here’s a few tips how to maintain those strong retail relationships with existing partners whilst undergoing a D2C rebrand.

Continue to Innovate

Remaining competitive in this environment requires establishing an in-depth relationship with your customers for obtaining key insight into their buying habits, expectations and socio-economic challenges.

Utilising information from every transaction into actionable insights will put you in a strong position to anticipate and respond to a changing market.

Define and share your roadmap/strategy with your distributors, retailers and even key stakeholders to instil confidence that your products and/or services will continue to evolve under a new business model.

Digging for Data

A direct-to-consumer commerce model enable a business to collect essential information in order to shape each individual customer’s experiences, subsequently increasing sales and customer retention/loyalty.

Selling directly on your ecommerce platform allows you to connect digital marketing activities with historical customer behaviour, effectively minimising the frequency of returns and improve customer satisfaction by personalising the entire brand experience.

Divulge what you learn with your distributors and retailers, to improve the overall customer experience, along with the quality of products and services, which can ultimately be used to aid your business roadmap.

Developing Consumer Relationships

The relationship you have with your partners is a key point of differentiation, regardless of industry.

With an established distribution and/or retail partner relationship, try offering an improved sales service & support and frequently collaborate with them to protect and promote your brand. You scratch my back and all that.

As online presence becomes more critical to business operations and brand growth, a headless ecommerce solution for manufacturers is becoming an increasingly popular choice.

It allows priority to be given to great customer experiences, regardless of other business systems and processes.

Potential customers will want to learn more about your backstory, brand values and operations. Buyers are looking for long-term partners that act on their values.

For example, involving themselves with charity work, emphasising the importance of green manufacturing and ethically sourced goods, etc.

Subsequent buyers may be more inclined to pay a premium for goods and services they trust have been sourced/produced both ethically and sustainably.

That’s a Wrap

After lockdown measures closed the doors of brick-and-mortar stores and forced customers online, traditional B2B brands faced a significant challenge.

Now despite the resurgence of the High-Street, and an over-saturated digital market, manufacturers can actually capitalise on their traditional resources and take matters into their own hands by evolving into a comprehensive D2C retail channel themselves.

One quick and effective method to adapt to the profound changes we’re seeing in the retail industry is by rapidly investing in and integrating a D2C retail channel.

When meticulously executed, with commercial priorities clearly defined to key stakeholders, shifting to a D2C model could liberate you from the constraints of a traditional B2B wholesale model and reap the rewards for both your business and your customers.