Manufacturer B2C / DTC Sales

As we enter 2023, there will be fewer department stores, specialty stores, and mom and pops retail stores. With fewer retail stores in the industry, manufacturers of consumer products are forced to sell directly to consumers to make up for the lost sales. In addition, many retailers went out of business during the Covid-19 lockdown or post-Covid-16. This void now allows the manufacturer to sell directly to consumers.

I will provide insights into how manufacturers can scale their e-commerce business when there are limited resources. I will discuss software, operational processes, Marketing, Advertising, building relationship with online retailers, and much more.

I will share a personal experience of when I helped drive innovation for a small manufacturer in Sylmar, California, and helped drive Amazon sales to 7 figures within three years.

Manufacturer Story

In 2014, I joined LeatherPro Inc to expand their direct-to-consumer initiative. When I joined, they had a small eBay presence and an amazon business that sold about ten orders per day on average. Leather Pro was also dropshipping blind shipping. Therefore, the company knew there was some demand for their product in the DTC market.

LeatherPro Inc is probably the only U.S.A manufacturer in Sylmar, California. In the early 2000s, they gained enormous success as they were one of the first to manufacture flip phone cases. The cases were sold nationwide to cellular phone stores, distributors, and governments agency. However, after the 2008 recession, the landscape changed significantly.

One of the first changes was fewer retail stores and distributors to sell to. The second was the release of the first iPhone in June 2007. Unfortunately, the first-generation iPhone hit the U.S. market, which didn't help the business. This was the beginning of the smartphone revolution. From 2008 to 2015, there were more smartphone releases than flip phones, and the owner Brian Eremetia knew that he needed to go DTC to stay in business.

Standard Operations Process

LeatherPro Inc had registered a brand name Turtleback Case way before trademarking became popular on Amazon. This made it easier to sell under this brand and helped to centralize marketing, advertising, and operations under this trademark.

The first goal was to create and tackle the lowest-hanging fruit, as the saying goes. I will walk you through some processes my team and I had to develop. This will allow you to understand some of the SOP that I help develop during my time at LeatherPro.

The 1st Setup

There were plenty of sales channels for our team to set up and start selling. However, we had limited human resources. Therefore, we decided to select only two sales channels and focus the first six months on learning and becoming experts in those channels.

The hot marketplaces in 2014 were eBay and Amazon.

• Downloading templates and Flat files to set up products, saving them with dates, and running reports were imperative to updating Amazon and eBay. This process sometimes took 80% of our time.
• the company purchased a DSLR Camera and lightbox to do pictures and editing in house
• By the end of 2015, it was evident that eBay would only be 20% off of Amazon's Sales. Amazon's sale tractory grew from 10K to 20K to 80K per month.

The 2nd Step

Centralizing orders was the second step in developing the SOP. We launched Shipstation.com to aggregate the order and tap into their negotiated rates for USPS, UPS, and FedEx. In 2015, You were able to ship a 2oz padded envelope for about $2.80 on shipstations.com using USPS postage. Those days are long gone.

Shipstation.com was a top-rated software in 2015, and the cost was very affordable. Some of the features that my team implemented were:

• Customize Packing slips, Batch process orders, great shipping rates, schedule pickup, and push tracking information into the marketplace

Customer Service

• The team logged into Amazon, eBay, and Sears three times daily, checked for messages, and replied to them promptly.
• We created a % of the acceptable return of no more than 8% of total Sales
• We accepted all returns or exchanges of the product with no questions asked
• Refunds were processed when the product arrived at the warehouse.

The 3rd Step

In 2017, the total combined monthly sales were over 100K for Amazon, eBay, Newegg, sears, Esty, Walmart, Bestbuy, and turtlebackcase.com. It was tough to maintain the product listings. My team reached out to Channeladvisor, now owned by CommerceHub. It took us about three months to sync and connect all the marketplaces. This initiative allows us to reduce our time on product setup and product updates by 60%. After setting up ChannelAdvisor, we tackle Zendesk.com to centralize the customer services responses, which increase our productivity by 20%.

Overview

There are a lot of benefits to going direct to consumers, and it requires good planning, goals, and finding a lot of solutions and applications that can help you to sell more to consumers.

Every six months at Leather, we fine-tune operations to keep up with the growth. This also changed the SOP for the best, and the e-commerce team grew from 2 to 5 staff members within a few months.

I left LeatherPro in 2018 but remained a consultant until the end of 2019; I keep in touch with them and have a great relationship with the owners. I will post other experiences and resources in the next several weeks to help you develop your business.