When a product starts as a direct-to-customer (DTC) brand and experiences a successful digital sales platform with major growth, the logical next step may be to expand the brand into the retail market. Also, it has become just as important for retail-only (brick and mortar) brands to move their product to a digital storefront, giving customers the choice and raking in sales from many directions.
No matter where your product made its first sale, to reach a maximum audience, it’s important that it makes it to retail shelves and onto virtual ones. While there are many areas to consider when entering a product into a new market, the logistics of moving from DTC or business-to-customer (B2C) to business-to-business (B2B) are where order fulfillment can get overwhelming. That’s why outsourcing your B2B order fulfillment to a third party like WSI can be highly beneficial.
The Direct-To-Consumer Process
DTC fulfillment is (usually) a three-step process: manufacturer to wholesaler to consumer. However, B2B can be a part of an even longer process: manufacturer to wholesale to distributor to multiple retailers to consumer. This is oftentimes a big leap for sellers and presents certain challenges, but that is where a 3PL with retail compliance and freight brokerage service (FBS) can be of assistance. Additionally, understanding the nuances of LTL and FTL shipping can make this transition smoother.
When a B2B shipment goes out, it’s typically a large-volume single order, or there may be a few large-volume orders. Depending on which retailers a brand is shipping to, they may have different requirements for how the products need to be packed and labeled to avoid chargeback fees. Managing the different requirements of retailers and end-consumers all at once can be overwhelming for a B2C brand that has not had the experience of high-volume orders before.
Differences Between B2C Fulfillment and B2B Fulfillment
One of the challenges brands may face when comparing B2C fulfillment and B2B order fulfillment is encountering new issues with the supply chain and having to avoid out-of-stock products due to their growth in order volume. This is where efficient inventory management plays a pivotal role.When products go out of stock, they create unnecessary slowdowns in sales for both the brand and the retailer they are selling through. Furthermore, big-box distributors or retailers will impart fines for products that drop below service level requirements. This can prove costly and detrimental to your business’s bottom line if you are not well prepared..
On the opposite side of under-stocking is overstocking. Improper forecasting of a product within a market can backlog manufacturing and operations, and if your product has an expiration date, it can be costly to lose inventory to spoilage. The managing of supply in terms of weeks for large retail outlets is arguably the biggest challenge when it comes to newly retailed products.
Additionally, there are multiple distribution centers, and they aren’t necessarily going to be identical in terms of product consumption. A misstep in any of these crucial phases of B2B order fulfillment without appropriate adjustments can be costly for everyone in the process — the product owner, the distributor, the retailer, and the customer.
Differences Between DTC and B2B Order Fulfillment
A big difference between DTC and B2B order fulfillment when selling through retail outlets lies in fulfillment negotiations. This involves more than a customer checking out their online shopping cart. Sometimes it requires extra time before processing even begins. Paperwork and response time for things like requests for quotes, approval, and negotiations can sometimes take days or weeks.
When a retailer has buyers looking for products to stock their shelves, part of these buyers’ job description is to get the best price on products they think will sell and with the best profit margin. Bulk discounts are part of the game, and it is something that just doesn’t apply to B2C fulfillment.
Another aspect of B2B order fulfillment that draws out the timeline is shipping. It costs more and requires rules to be met in handling, labeling, invoicing, and routing guides for the various retailers. In addition, there are also federal regulations that must also be met. If these rules of fulfillment that are part of a business contract are not adhered to, the retailers will again impart penalties on top of chargebacks. This can lead to smaller orders in the future or an all-around severing of the business partnership.
Contact WSI for Your Fulfillment Needs
Fortunately, all of these potential obstacles can be avoided, and the best way to handle them is to let a professional FBS assist your company in transitioning over to fulfillment for B2B, so you don’t get behind before you even get a chance. Let WSI help with your transition from B2C fulfillment to B2B order fulfillment. We have the experience and knowledge to provide the service you require to start selling your products at the retail level. Get in touch with us today!