Manufacturers have traditionally relied on trade intermediaries to put their goods in front of buyers. But the rise of ecommerce and the availability of affordable digital tools are encouraging a growing proportion of British manufacturers to cut out intermediaries and sell directly to the people who use their products. This guide explains why the shift matters to manufacturers and how to start selling directly to end customers.
What Is Direct-to-Consumer (D2C) in the Manufacturing Sector?
Direct-to-consumer (D2C) in manufacturing refers to manufacturers selling their products directly to consumers, bypassing third-party intermediaries, such as distributors or retailers. Rather than passing goods along a chain, and ceding control of the customer relationship, the manufacturer owns the entire journey from production to purchase.
The D2C model does not require manufacturers to abandon existing distribution partnerships. In practice, most operate D2C channels in addition to wholesale or retail intermediaries, using the direct channel to open new markets and protect margins while continuing to serve established trade customers. What distinguishes D2C is that the manufacturer maintains full control over the brand’s marketing and presentation and directly manages relationships with its products’ users.
Key Takeaways
- Most UK manufacturers that have opened direct-to-consumer (D2C) channels continue to sell through wholesalers and retailers.
- D2C’s most immediate benefit is improved margins. Capturing retail prices helps manufacturers boost per-unit returns.
- Another benefit is access to customer data, which gives manufacturers a clearer picture of who their customers are and what they want. It’s a strategic advantage that compounds over time.
- Consumer appetite for British-made goods is strong, but many buyers say British products are hard to find. D2C helps manufacturers reach those discouraged consumers.
- Success depends on operational readiness; customer service and fulfilment require real investment, as does inventory management. ERP software enables manufacturers to run D2C alongside trade distribution.
Manufacturing Futures: Tomorrow's Vision
Manufacturer-to-Consumer Explained
The standard model for selling manufactured goods to the public relies on a chain of intermediaries. Margin erodes at each link of the chain, and the manufacturer has little or no visibility of its end customer. The D2C model shortens this chain. The manufacturer builds or commissions an ecommerce site to market its goods directly to the public and manages fulfilment itself or through a third-party logistics provider. The customer pays a retail price to the manufacturer, who captures the full margin. Crucially, the manufacturer also collects first-party data, such as purchase history and browsing behaviour, that would otherwise accrue to the retailer.
The model is not new in principle. Manufacturers with prestige brands and their own retail outlets have sold directly to end customers for decades. What has changed is the cost and ease of selling direct. A credible branded online store can be built in weeks, and social media advertising allows targeted reach without a large marketing budget. Logistics networks have also evolved to handle individual consumer parcels efficiently.
D2C Is a Growing Model in Manufacturing
D2C sales in UK manufacturing are becoming a significant commercial force. The D2C retail market grew by more than 180% between 2019 and 2024, though expansion has slowed more recently. A 2025 survey of British consumer attitudes found a strong appetite to support UK manufacturing, but consumers wanted lower prices, greater availability and clearer labelling for British-made products. Manufacturers are responding to this challenge: 55% of UK manufacturers say expanding their offerings in response to customer needs is their biggest growth opportunity, according to a report from the PwC consultancy. PwC describes the sector’s direction as a move from “selling what we make” to “making what customers want”. D2C channels are central to this reorientation.
How Does Manufacturing-to-Consumer Work?
A D2C sale moves through four main operational stages: marketing, sales, logistics and customer service. Each requires the manufacturer to build capability it would otherwise outsource to retailers. The operational infrastructure that ties these together is usually an ERP system, which integrates ecommerce, order processing, stock management, customer records and financial data.
Without a retailer to present goods to passing footfall, the manufacturer must build its own audience. Typically, this involves search engine optimisation and paid digital advertising, supplemented by email and social media marketing. Social media channels are growing in importance, particularly for consumer goods aimed at younger demographics. With smartphone transactions representing well over two-thirds of all ecommerce sales in the UK, mobile-first design is essential for any D2C storefront.
For their storefront, most manufacturers start with a branded website built on an ecommerce platform. This site hosts the product catalogue, handles orders and sets pricing. Depending on the product and target audience, the sales channel may extend to a mobile app, a marketplace or a physical pop-up store. The key distinction from selling through a retailer is that the manufacturer determines the selection and presentation of products for sale and manages its own pricing, including discounts and special offers.
Logistics for a D2C model are operationally more complex than simply shipping pallets to a distribution centre, since orders must be fulfilled individually and returns handled efficiently. Furthermore, consumer expectations concerning delivery speed and returns handling have been shaped by large online retailers, so manufacturers must either develop in-house order-fulfilment capability that meets those consumer expectations or partner with a third-party logistics provider.
Manufacturers accustomed to trade distribution will need to develop customer service capability. When a consumer purchases direct, any query, complaint or return comes back to the manufacturer. This requires help-desk capacity that many manufacturers lack. Building this capability is one of the most significant operational investments in setting up a D2C channel.
How Manufacturers Benefit from Adopting a D2C Strategy
Manufacturers that adopt a D2C strategy while maintaining existing distribution channels gain a range of commercial advantages over those that sell exclusively through third parties:
- Strengthened brand control: D2C channels enable manufacturers to build consistent brand identity in every customer interaction. When a manufacturer sells through a retailer, a product may be discounted or poorly displayed, and it may compete with other brands. A D2C channel gives the manufacturer full control over its brand, including the design of the customer experience and the selection and pricing of products presented to potential buyers. Manufacturers can show their complete range or focus on slower-moving or higher-margin items that retailers might decline to stock.
- Expansion into new markets: D2C channels remove many barriers to geographical expansion. A manufacturer that has historically served only UK trade customers can, in principle, begin selling to consumers anywhere in the world. And there are also potential new markets within the UK, because D2C channels make it easier for consumers to find and purchase products from UK manufacturers.
- Enhanced feedback cycle: Selling through intermediaries creates a filter between the manufacturer and the market. Feedback about product quality or unmet needs passes slowly, if at all, along a distribution chain. In a D2C model, reviews and returns data go directly to the manufacturer, along with requests for support or customisation. A recurring product fault will quickly become apparent, while strong demand for a non-standard variation will be visible in orders. The PwC survey notes that manufacturers that can combine market insight with engineering expertise can design products that meet real customer needs.
- First-hand insights: D2C gives manufacturers access to customer data that is unavailable when selling through a retailer, such as geographic location, browsing behaviour and purchase history. AI can draw on this data to identify patterns in purchase behaviour that would take far longer to find manually, then use its findings to sharpen demand forecasting and marketing targets. Since privacy regulations, such as the UK General Data Protection Regulation and the Data Protection Act 2018, restrict the use of third-party data for marketing, owned first-party data is increasingly valuable. It can be used to personalise communications, shape product development and build loyalty schemes.
- Improved profit margins: Distributors typically purchase goods at a significant discount relative to the retail price, and retailers add their own margin on top. By selling to consumers directly, a manufacturer can capture the full retail price or close to it. Gaining access to retail-level margins through D2C does not necessarily lead to equivalent returns, since fulfilment and customer service costs must be absorbed, and manufacturers must take on marketing spend that in a traditional model is borne by intermediaries. Nevertheless, selling directly to customers can yield higher margins than an intermediary model.
D2C Challenges for Manufacturers
Adopting a D2C strategy has its difficulties. Manufacturers that have operated primarily through trade channels will encounter several operational and commercial challenges, including the following:
- Establishing consistent customer service standards: When manufacturers sell direct, the entire post-purchase customer experience reflects on their brand. Response times and returns handling become the manufacturer’s responsibility, along with customer queries and complaint resolution. Building this capability from scratch is resource-intensive. Since there is no retailer to absorb customer dissatisfaction, inconsistent customer service standards can directly damage the brand’s reputation. For many manufacturers, this is the steepest learning curve in the transition to D2C.
- Increased pressure on inventory management: Manufacturers accustomed to trade distribution typically organise production around moving large quantities of stock in a handful of transactions. But D2C requires manufacturers to hold stock for individual consumer orders, so they must forecast demand at product level, rather than by pallet or case. Overstocking ties up working capital, while understocking sends customers to competitors. In a D2C model, AI-powered demand forecasting (which can draw on sales patterns, seasonality and signals such as marketing activity or weather) and well-integrated stock management software are essential for keeping inventory lean without risking stockouts.
- Finding and reaching the right customers: Trade sales rely on established buyer relationships. Consumer sales require a different discipline entirely: building brand awareness and managing digital advertising at an acceptable cost. Customer acquisition costs have risen significantly as online advertising markets have matured. The shift towards loyalty programmes and subscriptions reflects the increasing difficulty of profitably acquiring new customers.
- Disrupting supplier relationships: Launching a D2C channel can create tension with established retail and wholesale partners that view direct sales as competition. A retailer that stocks a manufacturer’s products will notice if consumers can buy those same products directly at a lower price. Maintaining good relationships with existing trade partners requires a considered approach to channel differentiation. For example, manufacturers can offer exclusive products or bundles through the direct channel while selling their main range through their retail partners.
- Managing logistics: Moving from bulk shipping to individual order fulfilment is a significant operational step. Building in-house capability and contracting with a logistics partner both entail costs and complexity. Returns management adds an operational burden absent in traditional logistics, since manufacturers must process returned items individually and assess their condition before deciding whether to restock or write them off.
5 Tips for Starting a Manufacturing D2C Strategy
Starting a D2C strategy need not mean transforming operations overnight. The most effective approach is usually to establish a clear customer focus and progressively build capability.
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Identify Target Channels
Before building a D2C presence, manufacturers need to identify which channels offer the most accessible route to their target consumer. A branded website with an integrated ecommerce platform is a must for many, but some may find that an online marketplace offers a quick route to a wider consumer audience at lower initial cost. Social media channels are important for products with a strong visual or lifestyle dimension, especially those targeted at younger people. The channels to use depend on the products and the manufacturer’s resources. A small food and drink producer might begin with a subscription website, while a specialist tool or equipment manufacturer might test consumer demand by using a marketplace before investing in its own storefront.
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Create a Cohesive Digital Presence
The consumer’s first encounter with a D2C brand is usually digital, whether through a website, social media profile, online reviews or search engines. A cohesive digital presence keeps these touchpoints consistent, so that the same brand voice and product positioning appear wherever the consumer encounters the manufacturer. Consistency in brand presentation is crucial for customer confidence because consumers are unlikely to trust a brand that appears incoherent or incomplete. A consistent consumer-facing identity requires investment in product photography and customer-orientated copy, as well as a website designed to promote the purchase journey rather than the specification sheet. Mobile optimisation is also essential.
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Find and Address Market Gaps
A D2C channel works best when it offers something not readily available through retail. This might be products available exclusively online, a wider product range than any single retailer carries, personalisation options or subscription delivery for consumable goods. Manufacturers can use D2C channels to fill gaps in the product ranges offered by retail partners and to target consumers not easily reached through traditional channels.
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Provide a Personalised Experience
The ability to personalise is among the most significant advantages of D2C over retail. A manufacturer with access to first-party customer data can tailor communications and recommendations to each shopper’s purchase history and preferences. Personalisation does not require sophisticated technology at the outset. Even basic segmentation, such as distinguishing between first-time and repeat buyers in email communications, can meaningfully improve customer conversion and retention. However, AI-driven personalisation, such as product recommendations based on individual purchase history and dynamically targeted emails that adapt to each customer’s behaviour, is becoming increasingly important, and younger consumers tend to favour exclusive products available only through D2C channels.
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Utilise ERP Software
The operational complexity of running a D2C channel alongside existing trade distribution can quickly exceed the capacity of manual processes or disconnected software, leading to errors and inconsistent customer service. An ERP system integrates these functions into a single platform, giving manufacturers real-time visibility of stock and orders, with customer records and financials consolidated in the same system. Without it, scaling a D2C channel while maintaining service standards for existing trade accounts is very difficult. Cloud-based ERP, which avoids large upfront capital expenditure, makes integrated D2C technology accessible to manufacturers of all sizes.
Reach New Customers with NetSuite for Manufacturing
NetSuite Manufacturing ERP Software is purpose-built to support manufacturers embarking on D2C sales. It brings together inventory management, order processing, customer data and financial reporting on a single platform, giving manufacturers the operational clarity they need to run a direct channel without disrupting existing operations. With NetSuite, manufacturers can manage trade and direct orders from one place to maintain accurate stock levels and consistent account records regardless of where a sale originates. AI-powered demand forecasting draws on sales history, channel mix and external signals to keep stock balanced across trade and direct channels, as anomaly detection spots unusual patterns in spending or inventory before they become costly.
The NetSuite Ecommerce solution allows manufacturers to build and operate a branded online storefront that is fully integrated with back-office operations, so product listings and stock availability are always accurate and consistently priced. With NetSuite, manufacturers can confidently employ D2C strategies to reach new customers and build stronger relationships.
For UK manufacturers, D2C is an additional channel that, when set up thoughtfully, can strengthen brand control and improve margins while giving the business access to customer data unavailable through traditional trade routes. The growth of online commerce in Britain, combined with a consumer base eager to buy from UK manufacturers, makes D2C a real option for manufacturers of any size looking to improve margins and expand their product range. With a clear focus, a systematic approach and the right technology, adopting a D2C strategy can pay dividends.
Manufacturer-to-Consumer FAQs
What is an example of a D2C brand?
One British tonic water manufacturer is an example of D2C in action. The brand began selling through traditional trade channels but has since developed a direct channel on its website, offering gift sets and subscription services not available in conventional retail outlets. This gives the brand ownership of the customer relationship and reinforces its premium brand positioning.
What is the difference between a D2C and a wholesale strategy?
A wholesale strategy involves selling goods in bulk to a third party, typically a distributor or retailer, that then sells those goods to end consumers. Pricing is set at a trade discount to allow the retailer to add their own margin. By contrast, a D2C strategy involves selling directly to the consumer, with the manufacturer capturing the full retail price and managing the customer relationship. The two strategies are not mutually exclusive; most manufacturers that operate D2C channels also sell wholesale.
What advantages do UK manufacturers gain in developing a D2C strategy?
UK manufacturers gain several advantages from going direct. The domestic consumer market demonstrates a strong appetite for British-made goods but suffers from poor availability. A D2C channel allows manufacturers to reach consumers directly, bypassing retail filters that limit product selection and enables them to offer personalisation and brand-loyalty schemes. Going direct also gives manufacturers access to first-party customer data, which is increasingly valuable as privacy regulations restrict third-party data sources.
How can UK manufacturers leverage technology for a more successful D2C strategy?
ERP software is the operational foundation for a D2C strategy. Without it, managing a separate consumer channel as well as an existing wholesale distribution channel can quickly overwhelm operational capacity. In addition, ecommerce platforms enable manufacturers to build branded online stores with built-in order management and payment processing. Data analytics tools draw insights from customer purchase behaviour, helping manufacturers decide which products and audiences to prioritise. Marketing automation enables personalised communication at scale, such as welcome messages, replenishment reminders and loyalty rewards, without involving manual intervention for any interaction. Cloud-based solutions, which sidestep large, up-front capital expenditures, make D2C technology accessible to manufacturers of all sizes.
