Business Calcium Blog

Why You Need a Direct-to-Consumer Online Sales Channel

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Many companies market their products through traditional sales channels with master distributors, distributors, and dealers all playing a valuable role. Strong distribution channels, or outlets, are a hallmark of a solid company. However, even the most traditional company, heavily reliant on distribution partners, can still greatly benefit from developing a direct-to-consumer sales channel.

Here are the Top 5 Benefits of a Direct-to-Consumer Sales Channel:

  1. New Product Introductions. Introduce new products to the market without having to convince distributors to offer them.
  2. Increase Brand Exposure. The additional ads and impressions made while marketing supports and creates added pull of your products through other sales channels.
  3. Market Feedback. Your direct channel gives you a way of keeping your finger on the pulse of the marketplace. You get information about changes, trends and your competition from being able to speak directly to your customers. This also allows for you to test market reception to new products before the added expense of a full product roll out.
  4. New Customers, New Markets. Reach consumers who primarily chose to shop online. If you do not have a strong online presence, you will be missing an entire market segment.
  5. Making Money and Building Value.
    - Making money. Your direct channel is likely to be your most profitable area of your company due to the higher margins you make selling direct, and that you add these incremental sales with virtually no added fixed costs.
    - Building Value. The opportunity to leverage your manufacturing capabilities to create a valuable online property. There is great potential value in the equity of the website property created. For example, over time, a site may evolve into a full marketplace where advertising and sales of related but non-competitive products occur, adding profits and equity value.

So Why Should a Company Have a Direct-to-Consumer Sales Channel?
It’s simple: what is more strategic for a company than a direct sales channel?

I have enjoyed building many direct sales channels for companies for the last 20 years. The first one was by “accident”, and I “accidentally” sold it to Logitech, Inc. in 1989. Since then, I have created dozens for large and small companies from Hewlett Packard and Mitsubishi to much smaller companies serving small, interesting niches. As long as you do not maximize your marketing with a direct sales channel you are not fully in control of your own destiny. At anytime, the winds of the distribution channels can change; since you do not own your customer, when these winds change, you may be caught off guard. This is something which simply can’t happen with your own direct-to-customer sales channel. And for this reason alone, it’s worth controlling your destiny while making a little more money.

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