By Mylena Vazquez
In the age of entrepreneurialism, it’s usually the case that new brands start out as direct-to-consumer and then build their way up to a distribution channel that includes intermediaries. This is something that many businesses go to great lengths to pursue to build their company’s prestige and leverage intermediaries’ built-in audiences.
On the flip side, many of the older brands that we know and love have long operated using an intermediary-filled distribution channel. But as times have changed and newer companies’ successes have offered a direct-to-consumer proof of concept, these established brands have started to pivot.
Wilson’s shift from B2C to B2C + DTC
Wilson, the iconic sports equipment brand, who used to sell exclusively through sporting goods stores like Dick’s and the now-defunct Sports Authority, has recently made its first foray into the direct-to-consumer world. In July 2021, the company opened its first ever brick-and-mortar store in Chicago to coincide with the launch of its athletic clothing line. From 2010 until then, Wilson’s was selling direct-to-consumer through its website in addition to selling through intermediaries such as Dick’s Sporting Goods. Before 2010, Wilson’s sold exclusively through intermediaries.
With DTC, the power is in your hands
As mentioned previously, Wilson used to sell through the now-extinct Sports Authority, among others. This is one of the dangers of operating in a solely B2C space. Relying on intermediaries to sell your product can run the risk of putting your company and its performance in a vulnerable position should something happen to the company, should the company operate inefficiently, etc. The more entities there are in the distribution channel, the more control you lose over the process.
Going solo isn’t always the answer
While having total control over the distribution of your product might sound ideal, it’s not always feasible or wise in practice. Even Wilson still sells through Dick’s Sporting Goods in and smaller dealers in addition to its own storefronts and website. Many times, it’s wise to incorporate both DTC and intermediaries into your brand’s distribution channel strategy. But this can certainly cause a conflict of interest: wouldn’t a brand be more likely to push customers to buy through their direct channels in order to scoop up all the revenue, thus bypassing the middlemen? Not always!
Conflicts of interest are inevitable when, as a brand, you are selling your products yourself and through intermediaries. But depending on the brand, forging and nurturing partnerships with intermediaries can be the best way forward. Intermediaries themselves might have a reach that individual brands simply cannot. They can also have a strong brand reputation and built-in loyal audiences that brands can benefit from in a way that might not be possible in a solely DTC strategy. If brands partner with well-matched intermediaries whose strategies and motivations are aligned, everyone can benefit handsomely.
How does your company handle the conflicts that come along with a distribution model that involves both DTC and intermediaries?