If you’re a B2C company and you’re not selling to end-consumers through your website, you’re giving up a huge opportunity not only to sell at significantly higher margins than your wholesale business can generate, but more importantly, you’re leaving critical information on the table.
If you do any market research at all, from casual surveys to intense focus group sessions, you know the value of the insights and information you can gather. Direct-to-consumer sales give you that same info, but with greater accuracy. This isn’t data from people who might be distracted halfway through your survey or intimidated by the blow-hard who likes to hear himself talk in a focus group. This is data from people voting with their wallets.
There are risks, though. Fulfillment can be outsourced easily and cost-effectively. Top-notch customer service, though, takes more work. If that’s not already a part of your culture, it can be tough to ramp up quickly. Your company’s culture should factor into your decision.
Cannibalizing your sales and angering existing wholesale partners is another risk. As this article in the NY Times points out, there are no easy answers, but plenty of options to consider.
First, be sure not to be competing with your partners directly. They may still grouse about indirect competition, so you’re more likely to be successful if you can demonstrate that your multi-channel activity benefits them as well as you. (With increase brand awareness, for example.)
In the end, though, you have to do what’s right for your business overall. There’s real value in having a relationship with your end consumers. In most cases, that value is worth the effort required to find a multi-channel approach that keeps your other channle partners happy to be working with you.