A lot has changed over the last couple of years: wearing a surgical mask on the street isn’t considered strange, ordering groceries online has almost become a norm, and more and more companies than ever before have been adopting Direct-to-Consumer (DTC) practices. There is a lot to gain with DTC practices, like interacting directly with your customers and focusing on achieving service levels you have control over. However, it also means there are many more tasks you need to undertake to provide the best in service. So, what does the increase in more DTC mean for your business? Let’s break it down.
1: DTC and Third-Party Logistics Providers (3PLs)
3PLs are a critical component of making DTC possible. A 3PL will provide warehousing, fulfillment, and transportation services for DTC brands. With the right 3PL, a DTC can rest assured that orders are fulfilled on time and efficiently. 3PLs can also help DTCs save on cost by scaling with them as needed. Finally, most 3PLs will have the knowledge needed to provide DTCs with valuable information on how to best market their product.
However, working with a 3PL also has its challenges. For starters, 3PL’s often ship orders directly to customers, that’s what makes them so valuable! It’s one less responsibility for the DTC. However, businesses that utilize this feature need to be careful. It’s important for them to meticulously manage their inventory levels to avoid oversold or out-of-stock situations. This isn’t easy, especially in the first year of operation, but it is essential for the success of a DTC company.
Also, with so many different 3PLs out there, it’s difficult to find the one that is the right fit for your business. It’s important to take time to properly vet 3PLs to ensure the one you choose will complement your business and be a good match for your company’s needs. And that’s not even considering the cost! If you’re looking for a trustworthy 3PL to form a long-term partnership with, Cornerstone Edge can help. Our expert analysis of your business objectives and distribution requirements will enable you to compare the cost/benefits of in-house versus 3PL operations that will work best with your DTC practices.
2: A Holistic Commitment to Technology
DTC operations require top-of-the-line technology all around, not just a good website. A company or 3PL can have a gorgeous website with the best user experience, but the technology you implement needs to be able to support the company as a whole. A solid 3PL should also have effective transportation, integration, EDI, warehousing, and billing technologies.
If a DTC company focuses solely on one aspect of technology, the rest will fall apart. For example, there needs to be equal focus on technology that will provide accurate information on inventory levels. If sales don’t have access to key metrics like that, then they will fall short of performing their duties. It’s all interconnected, and that couldn’t be more true when it comes to technology. The right tech can grow your business, but improper use of technology can just as easily be one’s demise. With so many different options out there to choose from, it can be overwhelming to pick the one that suits your needs best. That’s why we provide software selection and implementation services, so you can focus on what you do best, running your business.
3: Intentional Staffing
When implementing DTC practices, companies may try to curb spending by saving wherever they can. Oftentimes, this means borrowing staff and resources from other parts of the organization to take on launch responsibilities. This myopic view of operations means scaling post-launch is almost impossible. It also means employees grow frustrated, exhausted, and jaded with the whole operation. In an era where the Great Resignation is still very much a reality, organizations need to do everything in their power to ensure they can retain the staff they have.
For DTC operations to work, you need to hire staff directly responsible for its success. This is how you can expect to see a return on investment (ROI). Though borrowing resources from other departments in the company may seem like a good strategy to save money, in the long run, it’ll only cost you more.
DTC may be the right option for your business, but only if it’s done with a plan in place. Like implementing a WMS, it’s a large undertaking that you don’t want to rush or underthink. Implementing DTC practices isn’t an overnight business change, but rather a strategic endeavor that takes a lot of intentional planning to be executed successfully. As your supply chain partner, Cornerstone Edge can help you navigate those changes, whether it be with a supply chain evaluation, planning a facility redesign, or selecting the 3PL that’s right for you. Reach out to us, we’re here to help you on your efficiency journey.