D2C vs. B2C vs. B2B2C: If you are a manufacturer or work in the industry, you know that the areas of Marketing and Sales can be a real challenge for the segment.
Generally, factories develop production structures in depth, delivering products and services with excellence.
However, sometimes the commercial sector ends up linked to traditional sales channels. Among distributors, retail representatives, salespeople, and other intermediaries, the distance between manufacturers and the final consumer tends to be significant.
Your company can sell directly to the consumer through these formats and get excellent results. Want to know details about D2C, B2C, and B2B2C? So stick with us and find out what they offer and how you can implement it in your industry.
What Is D2C – Direct To Consumer
D2C is the acronym for “Direct to Consumer.” The concept refers to eliminating intermediaries in the commercial area and, thus, provides for direct sales to the consumer.
The model, also known as DTC, makes the direct connection between industry and user, with possibilities for higher profit margins and a close relationship with customers.
In addition, it can be applied in companies of different sizes and sectors, allowing wide use in the manufacturing sphere.
With advanced internet options, manufacturers can develop D2C virtual stores and bet on direct sales with less financial and operational impact than if they were to open physical DTC stores.
A format is also an excellent option for industries that want to test new products, services, and deliveries, as e-commerce allows faster and cheaper actions than physical commerce.
Benefits
- The elimination of intermediaries and their commissions is possible to have higher profit margins.
- Greater control over the company’s Marketing and Sales areas (traditionally operated by commercial intermediaries).
- Fast, inexpensive, and extensive access to product usage data.
- Feedback is closer to consumers and, consequently, receives more information to feed the product development chain.
- Fast, inexpensive testing of new products (such as long-tail items) and new markets.
Disadvantages
- Greater demand for service and, therefore, the need for more efficient control over the area.
- To compensate for the low ticket per sale, more transactions need to be carried out, which may require internal changes in logistics and service.
- According to the size of the company and its demand in D2C, it may be necessary to assemble a team fully dedicated to the new sales channel.
D2C Business Examples
- Woodward
- Britannia
- Yogurt
- Usaflex
What Is B2C – Business To Consumer
Business to Consumer (B2C) or, in literal translation, “business to consumer” is a prevalent business model.
Through it, companies sell their products directly to the consumer and, in general, in small quantities. Retail stores are a classic example of this type of business.
B2C companies market items are focusing on people who buy the products for personal or family use or as a gift to another individual.
Benefits
- Large market to be explored and served.
- Simplified business process.
- Greater control over the Marketing and Sales sectors and great possibility of campaigns and actions.
- Close relationships with customers and easy access to data and information about them.
- Faster sales cycle overall.
Disadvantages
- Low average ticket requires a significant sales effort to achieve a large revenue volume.
- For everything to work correctly, marketing, sales, and logistics must be well-aligned.
- CAC (Customer Acquisition Cost) is possibly higher than other business models.
Examples Of B2C Business
- outback
- Spotify
- GoPro
- Disney
What Is B2B2C – Business To Business To Consumer
Before understanding, B2B2C, or Business to Business to Consumer, is, let’s break down this alphabet soup.
Business to Business, or B2B, is the business model in which a company targets other companies. In the case of a factory, for example, it will be considered B2B if it produces and sells to other industries, businesses, or service providers.
B2C, as you have seen, targets the end consumers of its offer. For example, a food factory that sells only tiny amounts to its consumers can be considered a B2C company.
As we said, B2B2C is the junction of the two concepts. In other words, a Business Business Consumer industry focuses on other companies and the final consumers of their products.
Benefits
- Use of consolidated Marketing, Logistics, and Sales structures.
- More visibility compared to other proprietary sales channels.
- For traditionally B2B companies, B2B2C promotes the expansion of brand awareness, that is, consumers’ brand awareness.
- Reduction of credit risk, which passes to the company that makes the bridge with the buyer.
- Reconciliation of the advantages of both B2B and B2C.
Disadvantages
- Intermediation costs relate to transaction fees and fees with companies (such as marketplaces).
- Possibility of great competition within the same sector if there is not good market management in this regard.
- The sales process tends to be more complex, demanding a robust commercial structure.
Examples Of B2B2C Business
- Submarine
- Bahia houses
- American
- Bahia houses
- Walmart
- Free market
Differences Between D2C vs. B2C vs. B2B2C
We’ve already seen the definition of these three acronyms. Now, let’s check out the main differences between these sales models. Look:
D2C and B2C
When we talk about D2C, we refer to manufacturing companies that sell their items directly to the end consumer. They skip all commercial intermediaries, carry out the transactions and deliver to the buyer.
In the case of B2C, organizations from any segments and sectors that deal directly with consumers can be considered Business to Consumer.
B2C x B2B2C
In Business to Consumer (B2C), as we mentioned, the sale is made directly by the company to its target audience.
In B2B2C businesses, organizations have a close relationship with the consumer, but they use intermediaries — such as marketplaces.
D2C x B2B2C
There is controversy among scholars regarding the use of marketplaces by industries. For some experts, the fact of selling to the final consumer on sales platforms already disfigures the concept of Direct Consumer.
But other thinkers in the field believe that marketplaces still significantly shorten the path between manufacturers and customers. Thus, they frame the marketplaces in the D2C modality.
Also Read: What Is Virtualization, And How Can It Benefit Business?