Advantages of Direct to Retail for Brands

What Is Direct to Retail (D2R)?

Direct to Retail (D2R) is a sales strategy that allows manufacturers to sell directly to retailers. The goal of D2R is to eliminate the middleman and reduce costs for both the manufacturer and the retailer.

The D2R model has been around for a long time, but it’s gaining popularity as manufacturers seek ways to reduce costs in an increasingly competitive marketplace.

Advantages of Direct to Retail for Brands

Increase in Profits and Boosts Margins

For companies that have an existing brick-and-mortar presence, going direct to retail has the potential to increase profits and boost margins. This is because you’re not paying for additional expenses such as shipping and product returns. You also don’t need to worry about paying for marketing and advertising since you already have a customer base actively looking for your product.

Outsmart Competition by Pricing Products Lower

Since you’re not paying for middlemen like distributors, wholesalers, and retailers, you can afford to keep prices lower than your competitors. This gives you an edge over big-box stores and smaller retailers with higher overhead costs.

Lower Turnaround Time for Deliveries and Faster Time to Market

Another advantage of DTR is that it reduces the time between order and delivery. This is because there is no go-between involved in the process, who would take time to receive stock from the manufacturer and then deliver it to stores. The order goes directly from the manufacturer to the store or retailer. This will reduce delivery time significantly and help consumers get their products faster.

Reduced Product Development Time and Cost

If you have an established brand, it can take months or even years to create a new product line that meets your company’s quality standards and is profitable enough to sell at retail price points. A direct-to-retail model allows you to skip this step altogether by allowing you to sell your products directly through leading online stores like Amazon and Jet.com, where customers are already accustomed to finding high-quality goods at affordable prices.

Advantages of Direct to Retail for Consumers

Premium Products at a Reasonable Price

Consumers benefit from being able to purchase premium products at a reasonable price. Because there are no middlemen involved, retailers can pass on their savings to their customers. This means that customers can buy high-quality products at affordable prices.

Expanded Brands’ Portfolios and More Shopping Options

With direct-to-retail, brands can expand their portfolio by selling products in stores that aren’t usually associated with them. Say you are a beverage company looking to expand into Japan. With direct-to-retail relationships, customers can get your product in Japan quicker than otherwise possible.

In-store shopping choices are expanding – As more firms adopt direct-to-retail sales strategies, retailers have expanded their alternatives for customers who wish to buy products from these brands without having to go online or order online and pick them up in-store.

For example, some stores now offer online ordering services so that customers can place orders online and then pick up their purchases at the closest store.

The Difference Between Direct to Consumer vs. Retail

Direct-to-consumer (DTC) and retail are two different business models.

Direct-to-consumer (D2C) is a model of marketing and selling that bypasses the traditional wholesale distribution model. D2C brands sell directly to consumers through their websites or other digital platforms, such as social media and e-commerce sites.

The term is also used for companies that sell products directly to consumers without intermediaries, such as wholesalers or retailers.

Direct-to-retailers are companies that sell their goods directly to retailers. Retailers are often called resellers because they resell goods that have been purchased in bulk by other companies and sell directly to the end consumers.

Some retailers operate their manufacturing facilities, but most do not — they outsource production to multiple manufacturers to keep costs low while maintaining a high level of quality control over their inventory.

The difference between direct-to-consumer and retail is that D2C companies sell products directly to customers from their websites, while retail companies sell products through physical stores.

The advantage of direct-to-consumer is that it allows the company to eliminate middlemen such as wholesalers and retailers, who typically charge a percentage of revenue for each product sold. D2C also offers greater flexibility in terms of price, inventory, and distribution methods than traditional retail channels.

On the other hand, direct-to-consumer sales are more expensive because they require advertising and customer service to reach potential customers. 

Direct-to-retail can leverage their existing infrastructure and resources to sell products at much lower costs than D2C companies can afford on their own.

How American Trading International (ATI) Can Help Your Brand With Direct-To-Retail Relationships in Overseas Markets

American Trading International (ATI) is an industrial supplier that helps companies expand their direct retail relationships by providing international product sales. We have the expertise and experience to help you build your brand and grow your business.

We offer a variety of worldwide sales services that can help you with how to sell internationally:

Direct-To-Retail Relationships

We have relationships with thousands of retail outlets across the globe. We will work with you to develop a strategy to establish your brand in these outlets based on their product mix, demographics, and location. We can help you identify the best opportunities to introduce your products, whether it's through direct sales or our network of distributors.

Import/Export Services

American Trading International provides a full suite of import/export services, including freight forwarding, customs brokerage, and distribution services, and international logistics solutions for all types of food and beverage products. 

Entering New Markets

We can help you enter new markets by identifying partners and providing training on specific business practices. We offer local support on an ongoing basis so that all aspects of your supply chain are managed efficiently and effectively. We also advise on local regulations such as customs duties or import restrictions.

Logistics Solutions

Our logistics specialists will work with you to determine the best way to handle any shipment. They can manage everything from shipping schedules to customs documentation.

By cutting out the middleman, everybody benefits. The retailer makes more profit, the consumer gets better choices at a lower price, and there is less money wasted on the inefficiencies of trying to reach a broader market by using multiple distributors. It's a win-win situation for most parties involved.

Interested in hearing about what ATI can do for your business? Call us today at +1 (310) 445-2000 or fill out our form on the contact us page.

References

BLOG & Articles

Other News & Updates

June 29, 2022

Private Label Food & Beverage: How to Choose a Manufacturer

Are you interested in working with a manufacturer to make your own private label food or beverage products? Here's a detailed guide.

Read Article
June 23, 2022

Advantages of Direct to Retail for Brands

Direct to retail (D2R) sourcing model helps establish, build, and maintain a supply chain that reduces costs, increases margins, and protects you from the vagaries of the channel.

Read Article
June 8, 2022

Avoiding the Risks of International Business

If you're looking for new ways to expand your business and avoid the risks of international business, we can help. Discover how.

Read Article
May 30, 2022

Benefits of Having an International Sales Team for Your Business

If you want to make your business as successful as possible, you'll need a support team. Find out why having an international sales team is essential for growing your business.

Read Article