Direct-to-Consumer (D2C), is a business model in which manufacturers and Consumer Packaged Goods (CPG) companies sell directly to their consumers, as opposed to pipelining through wholesalers to retailers and then to consumers.
D2C business is highly beneficial when it comes to consumers. Consumers can purchase their desired goods at lower costs because it is manufacturer direct. Additionally, manufacturers can cut costs by removing the third-party "middle-men" responsible for the wholesale and retail sale of their goods. Although there are many reasons to strive to be a D2C corporation, there are many reasons companies do not make the transition, one of them being competition.
When a manufacturer makes the shift from B2B2C or Business-to-Business-to-Consumer, to D2C they suddenly begin competing with the retailers that once supplied their products to consumers. This means the company needs to start better understanding their customer, which is advantageous, to promote repeat business. Due to the difficulty of the transition to D2C, many manufacturers opt for a hybrid business model that empowers them to continue to sell to distributors while also distributing directly to their consumers as well. This method reduces risks while still providing many of the major benefits such as cost reduction and understanding the consumer market.
