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The Practices & Benefits of Direct-to-Consumer Businesses
People's experiences when shopping has changed dramatically over the past few decades. One used to see a strict line of progression as items moved outward from the manufacturing stage. Products were created and then marketed to both retailers and consumers alike. From there, a company would ship their products out to retailers. The retailers would then go on to further market the products and sell them to consumers. It's a long process with considerable duplication of effort. What's more, it necessitates several middlemen who stand between a company and the consumer who wants to purchase the product.
Until recently, there simply wasn't any other way to go about the sales process. All this changed when the Internet became nearly ubiquitous. Companies now have the option of marketing and selling directly to consumers without using middlemen. This lowers the overall cost of operation for the company which distributes the product. What's more, these companies often lower the overall costs for consumers due to their increased net profit. By eliminating the cost of a middleman, a company can pass some of those savings onto a consumer while still making a larger profit for themselves.
Some brands, known as direct-to-consumer brands, put a special focus on this type of business model. One can best understand the direct-to-consumer business model by examining a few companies which make use of it.
First Rite is the culmination of one woman's vision. Nikki Garcia started the company from her studio. She uses First Rite to promote and sell her fashion collections straight to the consumer. What makes this so remarkable is that her line is highly individualistic. Garcia's fashion lines exemplify her own artistic vision. By using a direct-to-consumer market, she was able to keep operating costs lower and enter into a competitive industry without requiring an elaborate infrastructure.
Haus uses a subscription model to sell custom wines. This type of subscription direct-to-consumer marketing is especially important when considering customer loyalty. Haus can experiment and innovate with a variety of different wines thanks to the trust of their customers. The customer base is essentially voting with their wallet based on their overall satisfaction with Haus. It shows that direct-to-consumer marketing can help build stronger customer loyalty than standard models.
United Sodas uses a similar subscription model when compared to Haus. The main difference is that United Sodas sells a wide range of personalized sodas. These are unique items that one would seldom encounter outside of the company's product line. The certainty of an established subscription base helps give the company a solid foundation to build upon. This ensures they're able to try out innovative new ideas, which would be too risky for companies not using a subscription-based direct-to-consumer model.
Beklina was the very first online eco-boutique. Their artistry and environmental awareness have created a strong niche market within a larger segment of highly independent women. The fact that they have a niche product that is also successful highlights another important aspect of the direct-to-consumer business model. Companies don't have to chase after the lowest common denominator within a large market. They can instead opt to be the absolute best within a more obscure demographic.
American Trench is an American clothing company that is heavily focused on the community aspect of the direct-to-consumer model. American Trench is family owned and places emphasis on that sense of comradery found within families. They want to bring people all over the country together as a community fostered on creating unique and dependable clothing. The direct-to-consumer model fits in with this viewpoint by offering a direct connection between customers and the company.
Made In Cookware
Made In Cookware was founded with the intent to rethink the kitchen landscape. Part of this process involved finding better ways to manufacture and distribute their products. The company's founders formed a relationship with innovative metalworkers from around the world. And they were then able to leverage those materials and a new distribution model to create professional-quality kitchen tools at a retail price. Their story highlights how direct connections within the direct-to-consumer model can go in multiple directions. Made in Cookware forged direct connections with both manufacturers and their own future customer base. By doing so, they created a direct to consumer product which combines higher quality with reduced cost for all parties.
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DISCLAIMER: We hope whatever you find on this site is helpful, but be cautioned that it may not apply to your own situation, or be totally current at any given time. Idea Cafe Inc. and all of its current and past experts, sponsors, advertisers, agents, contractors and advisors disclaim all warranties with regard to anything found anywhere on this family of websites, quoted from, or sent from Idea Cafe. and its related sites, publications and companies. We also take no responsibility for comments published by others on these pages.
TRADEMARKS: The following are Registered Trademarks or Servicemarks of DevStart, Inc.: Idea Cafe®, Online Coffee Break®, The Small Business Gathering Place®, Take out Info®, Biz Bar & Grill®, Complaint-O-Meter®, A Fun Approach to Serious Business, CyberSchmooz, and BizCafe.