One of the benefits of working on and helping businesses set up Paccurate is that we get a front-row seat to rapidly changing trends in the logistics and fulfillment spaces, which then go on to have transformative effects on the economy at large. With that in mind, believe us when we tell you we have never seen such a lurch in consumer trends like the one unfolding now: direct to consumer is the new normal.
"Direct to Consumer Brand? So just a brand, then?"
Historically, companies making consumer goods would have to clarify whether their go-to-market strategy was to sell directly to consumers or sell to other distributors. With COVID-19 straining our supply chain to the breaking point and brick and mortar locations still largely shuttered, brands need to adapt. The smart ones didn't blink when the shutdown began, and started selling goods directly right away. But many of them encountered hurdles they didn't anticipate.
Pitfalls and Challenges
Shipping eaches isn't always a walk in the park, especially for companies that have mostly only shipped LTL and TL. Without any controls in place to make sure parcel shipments are packed well, and with no tribal knowledge to fall back on, many newly-reconfigured fulfillment centers are having to walk before they can run.
Beware the Air Tax. It's hard for even seasoned e-tailers to avoid dimensional weight fees, but with limited space in carrier trucks and more penalties for low density boxes, new D2C brands need to be aware that allowing too much air in their boxes can decimate their margins.
Complacency over shipping spend. If you're new to the ecommerce game, you may have already negotiated with the parcel carriers and decided you've done all you can do. That's simply not true, and you run the risk of spending dramatically more than you have to. Here's why: your shiny new negotiated rate table has incentives built into it to pack a certain way. For example, some zones may reward fewer boxes while others reward multiple more densely-packed boxes. It's impossible to eyeball, and you need a cartonization engine to account for it.
Don't take our word for it
Hard data and further reading from other analysts around the web:
Joe Bellini gives D2C strategy tips backed up by hard numbers. Read it on SupplyChainBeyond.com.
Consumer behavior analysis by Accenture. See PDF on the Accenture site
Louis Columbus breaks down some statistics to drive the point home. Read on Forbes.com
Paccurate can be added tactically to any part of an Order to Cash process, without overhauling the whole system. Try the API for free and start taking control of your packing process.