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Retail Channel Pivot

Ever think that your business is moving forward and it feels as though sales are growing... but just not fast enough in terms of cash? Particularly businesses selling B-2-B, you know that you are producing more product, but you just don’t see the revenue hitting your bottom line quickly. Think about it – you get orders that you need to fill before shipping; you await the order prior to producing product; then produce the product to complete the order before shipping – wasting time in internal inventory; you have to pay to ship the product or deliver it yourself – both methods cost time / money; you ship product – but it spends an additional few days in transit – again waste; then when received by the retailer, but how long will it take for each retailer to get the product on the shelves – retailer inventory delay; then individually by store, how long will it take until sales are actually completed? Finally, what are each retailer’s time frames for replacement orders? Do they have to sell out in order to order again – placing volume burden on your production process or are you informed of sales and begin replacing product as sold? My guess would be the former. What if your product doesn’t sell – can the retailer return the inventory for credit?

Maybe it is just time for a channel pivot away from B-2-B and direct to consumers – B-2-C. Selling via a web site not only can produce revenue much more quickly; that you only pay to ship what is sold; and you can manage your product inventory to produce what you need when you need it – minimizing volume pressures. Last, sales through e-commerce produce instantaneous cash results, not to mention that you actually manage the margin that you derive from every sale. Now, your company does still need to build a functioning web site, develop social media activity to draw customers to your web site; and there is some hardware required to utilize e-commerce, but the pluses greatly outweigh the negatives.

What will my retail store customers think? They will think that you have discovered the reality of the internet. Different people now shop different ways – some like to shop in stores and there is nothing prohibiting your product from being found there; and some just shop for convenience via the internet and your product should be able to be found there too. This allows for greater product distribution opportunity, a wider potential audience, and at the same time provides the owner greater control over their own production output, supply chain, and profit margin. Seems like a winning formula to me.

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