Every Friday, we answer a common question about fulfillment, shipping, or business. This week’s question comes from one of the board gamers who entered our giveaway contest for Root. Today we will answer the following question: “why don’t manufacturers fulfill shipments?”
The Rising Tide of Direct-to-Consumer Sales
There has been a growing trend for a while where brands are beginning to sell directly to consumers. That means brands are looking to cut out middlemen of all types such as retailers and wholesalers. Ecommerce is growing, brick and mortar stores are shrinking. Indeed, it seems like selling directly to consumers is the natural response to the way our shopping habits as a society are changing. Why shouldn’t the supply chain change too?
Yet a recent study shows about 40% of US manufacturers sell directly to the consumer. Why isn’t this figure much closer to 100%? As it turns out, there are a lot of reasons why manufacturers may not want to fulfill shipments.
8 Reasons Why Manufacturers Don’t Fulfill Shipments
- Some goods just should not be sold directly. They might be too expensive to ship or they may require special shipping requirements such as refrigeration.
- Many manufacturers only want to work for clients. They don’t want to bother with branding and consumer sales!
- Similar to the above, many manufacturers do not meet the organizational, technological, or knowledge-based requirements that come with running a business aimed at consumers.
- Some businesses lend themselves better to retail than others, making direct-to-consumer sales less attractive.
- Fulfillment is complicated and many manufacturers do not want to deal with it.
- Some manufacturers are located in places where shipping to their main consumers is prohibitively expensive, such as a manufacturer in China with customers in the US.
- It’s easier to run a business where you specialize in one key business area.
- Finally, some manufacturers just don’t want to change.
Growing trends in eCommerce are shaking up the way we purchase goods. Everyone from suppliers to manufacturers to retailers must adapt. Yet not every business is fundamentally altered by the existence of the internet. Many manufacturers are continuing to conduct business the way they did before direct-to-consumer sales were viable on a large scale.