Finding The Sweet Spot Between Wholesale and DTC

The changing digital retail landscape has given companies more choices than ever before in how to brand themselves, reach their consumers, and sell across multiple channels. Wholesale, which used to be the king to the industry and still remains a valuable option for brands, has become just one of many important avenues for growth. While it hasn’t yet been eclipsed by DTC and drop ship, these channels are well on their way to carving out more of a space for themselves in the eCommerce world, and brands are taking notice. 

RetailDive pointed out exactly this dilemma last week in their article, ‘Brands may need retailers more than they realize.’  

Historically, wholesale has been a great option for brands in terms of security, since they fulfill an order and get paid regardless of what’s actually sold. But, they don’t earn a full commission on those sales, and they’re completely cut off from the consumers who buy their goods. Their products are available to a much larger potential customer base, but they’ve got no contact with those customers. For retailers, it’s also a pretty good set-up, although not one without flaws. Buyers get to choose exactly what they want, how much they want, and when they want it, plus  they can purchase products at a lower price and make a fair profit off of the markup. But, they’re often left with a surplus of goods that eventually need to be marked down if they’re not sold. 

On the flip side, direct-to-consumer (DTC) selling gives brands complete control over their products, pricing, relationships with customers, and marketing. But, they’re on their own when it comes to growth – whereas wholesale automatically opens millions of doors, DTC requires brands to work hard in order to gain visibility and attract customers. 

The sweet spot in the middle, which gives brands the benefits of both DTC and wholesale, is a hybrid option that combines both, but also introduces a third option: drop ship. 

Drop ship allows brands to be in control of what products get sold on a given retail site and in what quantity, to test and widen a product assortment, and to reach new audiences, without investing massive amounts of money or time on marketing campaigns to attract potential buyers. It’s the perfect complement to an all-around eCommerce strategy. With the rise of multi-channel commerce, it’s the ideal option for brands looking to attract customers at any and every stage of their purchasing journey, regardless of where they are: on a social media app, browsing on a desktop computer, or even (dare we say it) on the metaverse. 

Nordstrom Drop Ship

 

Onboarding to a drop ship retailer, though, can be a bit of a process. Retailers all require different data and images to add a brand’s products, and the formats they use versus the ones that brands use rarely ever line up. 

An automation tool like Cymbio’s speeds this process up and removes major obstacles that brands might face. For example, a brand that sells on one retailer and wants to expand to sell on another would normally need to find a third party to build an integration between their system and the retailer’s, which requires valuable time, money and resources. With Cymbio, there’s no need for this: the platform works with every retailer’s system, no matter what kind they use, and when a new integration is needed, it’s built in-house, with no additional charge. Service like this at a fast pace is what can help brands move from a DTC and wholesale-only model to a drop ship one that gets them the best of all these channels. 

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