Three Main Fulfilment Options for DTC Brands with Shopify Stores

 

The E-commerce industry generated revenue of about 4.891 billion US dollars in 2021, and this number is expected to grow by 30.6% by 2024. This indicates the potential of the e-commerce industry and what it can become. The prospect of increased revenue is what drives many physical stores to make the shift online.

Shoppers today also prefer the convenience of online stores. So this has created a need for brands to find new ways to connect to the online shopper and give them a personalized experience. And one of the successful models that fulfill customer needs today is the Direct-To-Consumer model.

Understanding Direct-To-Consumer

The Direct-To-Consumer model is self-explanatory based on its concept. It’s a model where businesses, brands, and manufacturers can directly sell to customers. It eliminates the need for intermediaries like wholesalers and retailers and the need to connect with their physical distribution channel. It also saves the manufacturers' logistics and communication costs. That’s why products on such platforms are priced lower than what you find at other retail stores.

At this point, the manufacturers can either diversify into a distribution channel for customer package delivery or stick to online retail and sort out the intricacies of the logistics themselves. For Example:

Traditional retail model: manufacturer> distributor> wholesaler> retailer> end consumer

DTC model: manufacturer> web advertising> end consumer

The DTC model is used for a tech-savvy customer base who prefers to shop online. Depending on your product volumes and where your customers are located, you’ll need to consider which order fulfillment method you’d like to invest in that makes sense for your business.

Here are some options for you as a DTC brand about how you can target your customers:

 

A Third-Party Service Provider

If you’re looking to simplify your business and reap the advantages of order fulfillment services, using a 3PL service provider is the best option. Third-party providers have a vast network of suppliers and manufacturers, carriers, and warehouses that’ll save on your shipping cost if you decide to do it yourself. Ideally, they should be shipped out in one to two business days. Also, if your 3PL strategically places your products near your target market, you’ll pay the ground rate for storage at their warehouse and pay lesser delivery fees.

Moreover, 3PLs closely work with shipping, air, and land carriers. They negotiate better discounts and shipping costs, which improves your profitability even more.

In this method, you have to hand over the control of the product’s movement before it is delivered to your customer. If you choose a 3PL that isn’t built to handle e-commerce products, the packages can get damaged during transportation. But most modern 3PLs now have a background in e-commerce shipping and have lower damage rates that can help improve your delivery record with your customer.

Dropshipping

Dropshipping is a good option if you’re willing to source reliable suppliers and manage your relationship with them. The entire fulfillment process is handled by your supplier or manufacturer in the dropshipping process. This way, you won’t have to spend a lot of time pondering over the logistics of the delivery process, but it does limit your control over the product.

The major benefit of the dropshipping supply chain is the simplicity of the process. Instead of worrying about buying the products, getting transported to a local warehouse near the customer, and having them delivered to the customer, you can simply let the manufacturer figure it out.

Self-Fulfillment Model

This model only applies if you’re selling low-cost items to a local community. So, in this case, you can invest in a local warehouse for storage. Since your customer base is local, you won’t have to pay too much for shipping fees. Also, the products will reach your customer much quicker as well.

The self-fulfillment model ensures that you’ve got complete control of the product during its handover to the customer. You can choose how to deliver the product and ensure it’s delivered in the best condition possible.

This model also comes with a steep price. Since you have more control over the process, it’ll take you time and effort to manage the delivery and storage operation and schedule the goods to be shipped to the warehouse, so you don’t run low on inventory.

Every second spent in managing your logistics is a second that isn’t used to grow your business and fine-tune your business strategy. So, if you’re just starting your business, this model will help you. Once you begin expansion, outsource your logistics through order fulfillment and logistics services to a 3PL logistics service provider.

 

Get Reliable 3PL E-Commerce Order Fulfillment Services At E-Commerce Express

If you're looking for 3PL e-commerce order fulfillment services for your online business, check out the 3PL  logistics services company, E-Commerce Express. They provide a variety of other third-party services like custom packaging service for dropshipping, Amazon FBA prep service, Shopify fulfillment service, product sourcing agents, branded and custom packaging service, warehousing receiving & inventory, and much more. Visit their website to learn more about their services.