D2C fulfillment strategy is becoming increasingly popular in modern businesses. It builds a direct relationship with the customer and delivers a personalized experience that sets it apart from the competition.

The success of a D2C business lies in its fulfillment center. Today, customers expect fast, personalised, and affordable delivery. Hence, a direct-to-consumer fulfillment center should adopt innovative fulfillment strategies to stay competitive.

When a brand sells its product on marketplaces like Amazon and Meesho, these platforms manage and fulfill orders on behalf of the brand. The platforms even charge high fees, which reduce the brand’s profit margins. So, most brands today prefer to sell products on their website and transition to D2C fulfillment services. It allows brands to have good profits and have greater control over pricing, promotion and logistics strategies.

What is D2C Fulfillment?

D2C fulfillment also known as direct-to-consumer is a supply chain strategy where businesses sell and deliver their products directly to consumers through different channels. It enables brands to take control of all aspects of the supply chain operation, like sourcing raw materials, manufacturing, storage, picking, packaging, and shipping. Numerous sectors have adopted this model, like fashion, electronics, fast-moving consumer goods, etc.

D2C fulfillment refers to the order fulfillment process for a D2C model. It begins when a customer orders a product online. The information is sent to the D2C fulfillment warehouse. The warehouse staff picks up the ordered product, does packaging and handed it to the shipper. No middleman is involved, meaning the orders are shipped straight from the direct-to-consumer fulfillment warehouse to the customer’s doorstep.

In the D2C fulfillment process, brands can outsource 3PL companies to handle their supply chain, or they can also do storage on their own and outsource only shipping services.

Difference Between B2B & D2C Fulfillment Center

• The target recipients in the B2B fulfillment centers are wholesalers and retailers, but the target recipients for the direct-to-consumer fulfillment centers are individual customers.
• The order size of a B2B fulfillment center involves large and bulk orders. However, a D2C fulfillment center deals with small, single-item, or small-quantity orders.
• A B2B fulfillment center does basic packaging. However, a direct-to-consumer fulfillment center uses unique and attractive packaging to enhance customer experience.

Benefits Of D2C Fulfillment Services

The benefits of direct-to-consumer fulfillment are listed below.

1. Greater Control

A D2C fulfillment center has more control over its product pricing, brand image, and logistics operation. It can make decisions based on the revenues or market demands without depending on intermediaries.

2. Improves Customer Experience

Research says that 80% of customers want to buy products from a site that offers a personalized experience.

A direct-to-consumer fulfillment center sells directly to customers. It enables the gathering of customer feedback and makes fulfillment changes if required to provide customers with an excellent delivery experience.

3. Increase Profit Margins

D2C fulfillment strategy does not have to give hefty commissions to retailers and wholesalers. Simultaneously, it does not have to invest money in shipping products to retail locations.

4. Market Exploration

Direct selling to customers enables a D2C fulfillment center to explore new markets, develop new products, and change strategies based on customer feedback.

Best And Effective Direct-to-Consumer Fulfillment Strategy

A business has several options for the best and most effective D2C fulfillment services. We are listing them below.

1. In-house Fulfillment

Some businesses choose to do the order fulfillment process by themselves. They manufacture and store products in their fulfillment center and ship them to customers when required. This gives the brand maximum control over all the supply chain processes.

2. Third-party Logistics Provider

A D2C business may not have experience handling all order fulfillment processes like packaging and shipping. In such cases, it can outsource D2C fulfillment services to a third-party logistics provider. A 3PL company is equipped with advanced technologies like a warehouse management system. It even specializes in numerous aspects like warehousing, transportation, reverse logistics, etc.

3. Dropshipping

The business partners with suppliers and sells products directly to the customer. Thus, a business does not have to store products or manage inventory in dropshipping. However, it has a limitation, i.e., the Company will not have direct control over the supply chain operations.

Challenges Companies Face in D2C Fulfillment

Here is a list of some challenges companies face in D2C fulfillment.

1. Infrastructure And Technology

Implementing advanced technology in a direct-to-consumer center can be costly and time-consuming. It requires seamless operations integration of order management, inventory management, and 3PL logistics solutions.

2. Inventory Forecasting

Inventory forecasting can be challenging for a direct-to-consumer center. Overstocking can add unnecessary carrying costs, while understocking can cause customer dissatisfaction.

3. Reverse Logistics

Dealing with returns can be complex for a D2C fulfillment center. An efficient process for managing returns or refurbishing is needed for successful reverse logistics.

How Direct-to-Consumer Fulfillment Works?

1. Order Processing

The direct-to-consumer fulfillment strategy begins when customers order on the brand’s website or any other direct sales channel. The order details are sent to the direct-to-consumer fulfillment center. The system checks to ensure the product is on the shelf for order fulfillment.

2 . Pick Product From Warehouse

The staff picks up the ordered product from the shelf of the D2C fulfillment warehouse. The staff does packaging carefully to avoid getting damaged during shipping. Most brands use custom or branded packaging to give customers a good unboxing experience.

3 . Order Shipping

The packaged order is handed over to the shipper. The customer will receive a tracking ID to track the shipment anytime.

A D2C brand must choose the right shipping company and optimize the delivery route to reduce costs and quickly fulfill orders.

4. Order Delivery

The shipping partner delivers the ordered product to the customer’s doorstep. Sometimes, the customer will not like the ordered product and raise a return request. The item is picked, checked, and kept again in the D2C fulfillment warehouse if it is in good condition.

Why is AAJ SCM the Ideal Partner for Your Fulfillment Needs?

• The fulfillment center of AAJ Supply Chain Management uses advanced technology like warehouse and inventory management systems to optimize the efficiency of operations.
• AAJ Supply Chain has fulfillment centers all across India. Thus, it helps your brand to store inventories closer to customers and fulfill orders quickly.
• The Company uses branded packaging to enhance the customer experience.
• The company even handles the return processes smoothly. It picks up the returned product, inspects it, and restocks it if required.

Conclusion

D2C fulfillment services allow businesses to sell products directly to customers without involving any retail channels or intermediaries. It has various benefits, such as improved customer experience and high profit margins. However, it also comes with specific challenges, like unique and branded packaging, which can become difficult for a direct-to-consumer fulfillment center every time. Fulfillment centers can overcome the challenges by utilizing advanced technologies.