DTC, or Direct To Consumer, is the way that companies can and should be looking to reach customers at a time of supply chain congestion. Vince Iacopella, our EVP of Growth and Strategy, recently participated in a webinar for Sourcing Journal on just this topic.
The typical distribution channel from manufacturer → importer → distribution center → brick and mortar → consumer is being upended and short-circuited by the pandemic-fueled pivot to e-commerce that brought online purchasing forward an estimated five years.
For importers and retailers used to selling through these channels, the question becomes how to maintain customer relationships in the macro while serving these clients individually in the micro. Distribution centers accustomed to truckload shipments to anchor stores in malls are having to rapidly pivot to boxes and envelopes that require the most cost efficient way to enter the shipping stream and travel the final mile to customers.
The DTC model pushes the origin point of a sale far enough upstream that for companies seeking to eliminate costs associated with ad valorem duties, US warehousing and pick-and-pack and trade remedy duties which exist on many exports from China, they can take advantage of 2015’s four-fold change in de minimis ceiling.
That year, as part of the Trade Facilitation and Trade Enforcement Act (TFTEA), the maximum amount that an individual or company could import duty-free per day was increased from $200 to $800. This provided companies the opportunity to select other opportunities further upstream for packing and shipping to the buyer, if they knew who that individual was.
Alba Wheels Up has been working with retailers, importers and e-commerce platforms to retool their supply chains to leverage this change to deliver both savings and create a closer relationship with the end consumer. Coupled with changes to the low-value entry processes offered by CBP (Section 321 and Type 86 entries), Alba ingests point-of-sale data, marries it to shipment data and presents it to CBP for expedited release and final mile delivery.
The webinar can be downloaded here to watch off-line, but for more information including receiving an assessment of the potential savings opportunities available to companies looking to switch from a traditional sales model to a DTC model, contact Alba today.
