From a passionate entrepreneur to a successful B2B wholesaler - but then what?
Thriving wholesale businesses have something in common, and it is passion. In the early days of the business there is an enthusiastic person, usually an entrepreneur, who is on fire. They are passionately dedicated to their cause. They want to make sure that like-minded enthusiasts can benefit from their products.
Buying and selling are key elements, and the more sales and distribution you want, the bigger reseller networks you’ll build. With growing stock units, discussions with resellers turn to mostly terms, margins and compensation. Professional buyers have no time, nor interest in the latest cool twists and turns your company stands for. What was kicked off from a passion is flattened with purchase contracts with strict policies and pricing.
Over time, wholesalers tend to lose touch with end customers because they spend their time with buyers. In the worst cases, the only remaining feedback loop B2B wholesalers have with consumers are warranty issues and complaints. This is where the connection to what the consumers value and want can get lost.
Is it time to bring back the entrepreneur’s enthusiasm by opening a D2C channel to support your business growth in the changing commerce landscape?
D2C is the next business opportunity that will help grow your existing wholesale business
Direct to consumer ecommerce strategy gives wholesalers the ability to bring back the control and to build relationships directly with consumers, without middlemen. You may have concerns regarding your retail network and there are many misconceptions keeping business owners from moving towards D2C. Weighing options needs to be done carefully, but the shift towards D2C is happening fast.
The benefits of going D2C for wholesalers are
- sharing the entrepreneur’s passion with like-minded people
- direct relationships with your customers
- having full control over the customer experience
- being creative, fun and memorable
- owning your data throughout operations
- having product reviews and customer testimonials to share with your distributors
- better margins, because you won’t enter into a pricing war with your retailers
- more leverage and knowledge for the retail discussions
- More insight to building your inventory to prevent shortage and overstocking
D2C sales do drive more revenue, but the real opportunities are in the ability to serve customers in a personalized, unique way, something only a brand owner is able to do. There are beautiful opportunities to work better with your retailers as well. Insight, data and improved feedback loops will benefit your whole supply chain.
How to start with direct to consumer business?
We find the best way is to approach D2C as any other business operation:
- Make a firm decision to commit to the business operation
- Allocate human and financial resources
- Find a niché to start with a limited offering
- Identify your like-minded people to get them to be your customers
- Invest in brand building and exceptional marketing
- Find the right partner and a scalable technology setup for ecommerce (go Shopify)
- Provide unique experiences for your customers
- Engage in dialogue with customers and collect data
- Drive decision-making with data
- Share your data with your retailers
Are there examples of wholesalers going D2C?Here’s one. Protechnic, a Finnish distributor founded in 1986. They represent quality brands Maxell, Motorola, Lenovo, Duracell, Polaroid, Tractive and Kodak. In 2020, they realized their wholesale business was maxed out in their market areas Finland, Scandinavia and the Baltic countries. To grow, they needed to make changes. The family owned business returned to their roots and set up a new business, BroShop to boost direct to consumer growth.
Ready to discuss your D2C opportunities?
Mareena Löfgrén, Brand manager, Woolman Oy
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