• Post author:

Direct-to-Consumer Fulfillment: Definition & Advantages

You are currently viewing Direct-to-Consumer Fulfillment: Definition & Advantages

DTC (direct-to-consumer) shipping works by eliminating the middlemen, such as retailers or wholesalers, from the sales cycle. With DTC shipping, suppliers can ship the order directly to the end customer at a much lower price than the traditional retail business. Social media and the influencer economy are the main driving forces behind the exponential growth of many DTC brands and the DTC market is expected to reach $151.2 billion by 2022 in the US alone. With their direct line of relationship with the customers, DTC businesses can offer lower prices, higher product quality, customer-oriented policies, and a better engagement with their end-users.

Advantages of DTC Businesses

There are several advantages to having a DTC eCommerce business.

Affordable Prices

In a traditional retail business, there are many parties involved such as manufacturers, suppliers, wholesalers, distributors, and retailers to keep a certain share of the profit for any particular product. The price becomes higher before reaching the hands of the consumers. DTC shipping eliminates the need of all these parties involved by reaching directly to the customers and as a result, the end customer enjoys lower prices.

Customer Engagement

Customer engagement is usually higher in the DTC businesses because the supplier or manufacturer is directly engaged with the customers. They can listen to the feedback and design more customer-friendly policies to keep their customers happy. With these policies, you can win the hearts of your customers and make them your brand advocates for better word of mouth on social media.

Quality Control

Both the customers and the business are in full control over the quality of the products. Because there aren’t many parties involved in the supply chain of the product, manufacturers are in control over the quality and handling of the products. On the other hand, the customers know they are buying the original product with the expected quality assurance directly from the supplier/manufacturer removing the risk of the counterfeit, fake, or adulterate product.

Easy to Start

Starting an online DTC is really easy to start with platforms like Shopify, woo-commerce, and other eCommerce platforms. Partnering up with a 3PL fulfillment company further removes the barrier to entry with their logistics and fulfillment expertise. DTC business is much easier and involves fewer parties than the traditional retail business and may require less capital investment.

While there are many advantages that DTC business enjoys over the companies using traditional retail methods, it also comes with some challenges. Order fulfillment is the single most important factor that determines the success of the DTC business. DTC businesses need an efficient shipping strategy and logistics technology to meet the customer’s expectations of fast, affordable, and reliable shipping.

Receive, pack and ship are the three simple steps in any DTC business. The key to success is to streamline this process in order to meet the customer’s expectations of faster and more reliable delivery of the product.

Methods to Establish DTC Shipping

In-house Fulfillment

In this method, the business handles all fulfillment processes itself. The order fulfillment process requires many things like inventory management, warehousing, logistics, etc. It gives absolute control over your shipping but requires a critical amount of time, resources, and capital investment. Once your number of orders grows the process becomes complex and requires sophisticated technology and logistics expertise to keep meeting the customer’s expectations and beating the competition at the same time.

3PL Fulfillment Partner

Partnering up with a 3PL fulfillment company allows you to hand the entire fulfillment process over to a third party. They are responsible for your inventory and the processes of picking, packing,  and shipping. Although you lose some control over the process, you can still track the performance of your inventory and order delivery.

Partnering up with a 3PL company offers some other advantages which may help your DTC business succeed.

  • Saves time & resources. Using a 3PL fulfillment company can help you save time and resources that go into the complex process of logistics and supply chain. You can focus on the strategic side of your business rather than the operational hassles of logistics and delivery.
  • Logistics expertise. 3PL companies have their expertise in logistics, warehousing, shipping, and distribution. They also enjoy the lower shipping fees and partnering up with them helps you expand to newer markets more easily and cost-effectively. They also use the state-of-the-art and expensive technology stack that you can use at a fraction of the cost.
  • Scalability. As discussed earlier, with the expansion the fulfillment process becomes complex. Using a 3PL company can help in the scalability without the massive investments of establishing the warehousing, tech stack, and logistics network.

Benefits of Partnering with ShipBots for DTC Fulfillment

At ShipBots, we make shipping hassle-free for our DTC business partners. With the informative dashboard powered by many powerful features you still are in control over your business. Our portal makes it easy for you to optimize and manage your inventory, tracking your orders, and managing the returns. We also provide custom packaging, real-time tracking, and the fastest delivery across the country through our strategically located warehouses.