Should branded manufacturers sell directly to consumers online?

It's the question on many branded manufacturers’ minds at the moment. Either you’re starting to think about ways to sell directly to consumers, or you’re brainstorming ideas to enhance your online strategy. E-commerce has shaken up the traditional model of selling solely to wholesalers and retailers. It’s also presented brands with new ways to engage with consumers and increase sales.

Many brands don’t yet have the capabilities to sell directly to consumers, or they fear they might upset authorized resellers or channel partners. But unless you want to fall behind the curve, now is the time to take control of your e-commerce journey and commit to a holistic online strategy.

It’s a new world out there, full of opportunities to expand your reach and grow your customer base. The rise of e-commerce has created a seismic shift in the way the world buys and sells goods. The bottom line: Selling directly to consumers will help you maximize sales and increase your following.

As a brand, you’ve probably noticed more traffic flowing through your website recently as consumers are hunting for more information about your products. But interacting with customers and potential buyers can be unfamiliar territory. If you can convert those informed and curious shoppers into buyers, whether through authorized channel partners or your own transactional site, your revenue numbers will likely climb.

To take the next step and reap the benefits of selling direct, it’s helpful to think like a retailer. This means interacting with shoppers more often and enhancing their experience. By joining conversations with target customers, you’ll:

Strengthen your brand: Retailers are able to control the customer experience from top to bottom — from marketing to packaging to fulfilling — with no middle man.

Learn more about your customers: Going direct will give you access to rich customer data, which you can use to improve your customer experience and tailor marketing campaigns.

Control your pricing: You’ll be able to set the tone on pricing and communicate the value of your products to customers, rather than having someone else do it for you. You’ll offer more selection: By offering your complete product line on your website, your brand loyal buyers can see everything you have to offer.

Increase your sales: You’ll likely see strong results by building brand awareness and deepening your relationships with customers.

Before you jump in, don’t get ahead of yourself. Take a step back and evaluate your business to ensure you have the infrastructure it takes to start selling direct. Each brand is at a different phase of the e-commerce lifecycle, and how you develop or improve your strategy depends on where you fit in. The phases include:

Offline only: You sell through brick-and-mortar locations only.

Authorized resellers: Your preferred authorized retailers can sell online.

Site linkage: You experiment with direct-to-consumer strategies and link to retailers’ sites for purchase.

On-site transactions: Channel conflict with resellers is less of a worry, and you start thinking about selling on third-party marketplaces.

Direct to consumer: Your website accepts transactions, and you’ve established a presence on online marketplaces.

No matter where you are in the e-commerce lifecycle, the online world has many revenue-generating opportunities waiting. First, you should determine your overall objectives. Are you more worried about increasing your sales, building brand loyalty or a combination of both? Maybe you’re just looking for a way to unload excess inventory?

Your strategy will also be determined by your current capabilities and your budget. Think about your technical ability to sell products, as well as your resources for marketing those products to consumers. Start small if necessary, but consider the long-term benefits you want to see. A multichannel roadmap that can help achieve direct-to-consumer success includes the following components:

Build or Revamp Your E-Commerce Site: A great step on the path to a fully direct-to-consumer strategy is implementing solutions like “where to buy” functionality, which connects consumers visiting your website directly to product pages on your preferred retailers’ sites. This will also help you gather data to understand consumer behavior. Once you’re comfortable, you can start thinking about accepting payments via your own Web store.

Sell on Marketplaces: Selling on marketplaces like Amazon, eBay, Sears and others will grant you access to the established infrastructure that each provides, as well as their loyal customers.

Consumers appreciate marketplaces because of their large selection, competitive prices and conveniencein providing offerings like free shipping. Once you’ve successfully integrated with a marketplace, you can scale up your number of product listings at any time.

Get Social: Social media is an important tool for cultivating a brand identity and starting conversations with your audience. The cost is minimal, and its ability to reach consumers and build their loyalty is invaluable.

Practice Digital Marketing: In addition to your traditional advertising campaigns, experiment with paid search and comparison shopping strategies to drive traffic to your website. A comprehensive digital marketing strategy on sites like Google and Bing is important for promoting your products and growing your customer base.

It is natural to be apprehensive about selling direct. A big issue for brands is the complex topic of channel conflict. The key is establishing a clear channel of communication with wholesalers and retailers to find the best middle ground.

Scot Wingo is CEO of ChannelAdvisor, a leading provider of software-as-a-service solutions that enable retailer and branded manufacturer customers to integrate, manage and optimize their merchandise sales across hundreds of online channels. The company’s platform enables customers to connect with new and existing sources of demand for products, including e-commerce marketplaces, such as eBay, Amazon and Newegg, search engines and comparison shopping websites, such as Google, Microsoft’s Bing, and Nextag, and emerging channels, such as Facebook.