As options for fulfillment have changed and expanded, companies now have a wide range of models available to help them get their products into the hands of consumers. One such model has continued to grow in popularity over the years as it gives businesses the most direct access to customers and simplifies the steps between production and last-mile shipping: the direct-to-consumer (DTC) model.
Because the fulfillment process is more streamlined and direct, the logistics must also follow suit. Here is everything you need to know about DTC Logistics for optimizing and supporting direct-to-consumer sales.
What Makes DTC Fulfillment Different?
DTC fulfillment is unique in that it involves no third-party seller or retailer. Because businesses are selling their products directly to customers, often resulting in lower prices and much faster shipping. Although the process appears simplified by involving fewer parties in the transaction, DTC Logistics is actually more complex than business-to-business (B2B).
B2B Fulfillment vs. DTC Fulfillment
In a traditional B2B fulfillment process, the buyer is another business that acts as the final retailer or seller to the consumer. This buyer orders a large number of products from the original business, which are shipped to them on one or more pallets. At this point, the products are out of the hands of the original seller.
In a DTC fulfillment model, the buyer is the final customer—the consumer—who places an order for a smaller quantity of products that are then shipped directly to them from the warehouse. Because all customer orders happen between the original seller and the customer, the shipments happen in smaller boxes rather than large pallets, though the number of products going out may be similar. In other words, one or more pallets of products are split into several hundred shipments to each customer.
DTC Logistics and the Fulfillment Process
With the increase of e-commerce businesses operating direct-to-consumer models for sales, the need for DTC Logistics has naturally increased. Because many direct-to-consumer businesses are smaller brands, they usually must outsource their DTC logistics to a third-party logistics provider (3PL).
A 3PL handles all aspects of DTC Logistics on behalf of the company from the moment products arrive at their warehouse, getting products in the hands of the consumer as quickly as possible once an order has been made. Here is a breakdown of everything a 3PL handles when it comes to DTC Logistics:
Warehousing/Storage of Products
Storing your products as they await orders is a key piece of DTC Logistics. Some B2B businesses may not require external warehousing, as their products go directly from the manufacturer to the purchasing business in bulk.
Direct-to-consumer is different, however, because your customers expect much faster shipping times and don’t want to wait for a product to be manufactured before they can receive it. DTC products must be ready to ship the moment an order comes in, and that requires having the products already packaged, in a warehouse, and ready to be picked from a shelf and placed on a truck to deliver.
This is even more essential when selling products that have a limited shelf life to start with. Demand for DTC food is on the rise, meaning food and beverage businesses require warehousing with cold storage to manage the temperature of their products throughout the fulfillment process.
Inventory Management
Because inventory is constantly flowing in and out of the warehouse, an important aspect of DTC Logistics is managing the inventory. Orders usually are not in bulk and may ebb and flow in different seasons or as a result of special promotions, sales, or even something as simple as a viral Facebook ad. DTC inventory management requires products to constantly be in flux, replenishing in anticipation of consumer demand.
Last-Mile Delivery
One of the biggest pain points of any fulfillment process is the last-mile delivery, which is the only piece the consumer sees directly. If you are managing the entire fulfillment process in-house, this leg of the delivery process often becomes significantly longer and more frustrating for your customers.
A 3PL can ease the strain of last-mile delivery in DTC Logistics by both maximizing efficiency and decreasing expenses. As a business with a laser-focus on logistics, 3PLs often have good relationships with last-mile delivery providers and can work with UPS, Fed-Ex, USPS, and even their own transportation methods to ensure your customers receive the fastest shipping time possible. Two-day shipping is not longer an Amazon-only perk nowadays!
How Smart Warehousing Surpasses Expectations with DTC Logistics
As a 3PL provider that focuses on utilizing the latest technology and optimizing warehouses with the most accurate demand forecasting and strategic warehouse planning, we are passionate about making DTC logistics as smooth and seamless as possible. With e-commerce fulfillment benefits like nationwide 1-2 day shipping, omnichannel integrations, and completely transparent inventory visibility, you can trust your logistics are in safe, smart hands. Contact us today to learn how we can make direct-to-consumer pain points a thing of the past!