B2B vs. DTC Fulfillment: Key Differences and Hybrid Benefits

Business-to-business (B2B), sometimes called wholesale, and direct-to-consumer (DTC) fulfillment are both vital aspects of the logistics industry. 

B2B and DTC Basics 

On the most basic level, B2B warehouses manage inventory for companies who are selling to another business. DTC warehouses work with companies who sell their products to consumers directly. 

To break this down a bit more, let’s say that a 3PL has 100 reusable water bottles to sell. In a B2B warehouse, the water bottles would be placed on a pallet and all sent to one end location. In a DTC warehouse, the water bottles could potentially be shipped to 100 different individuals. 

DTC warehouses tend to be more logistically complex due to the nature of picking, packing, and shipping many more small orders. In B2B, there are much larger orders being fulfilled with strict labeling and packaging requirements. 

Main Differences in B2B and DTC Fulfillment

Warehouse setup

• DTC products are typically stored in bins, boxes, and easily accessible shelving. B2B inventory tends to be on a pallet and can be stored vertically (meaning, high in racking, for example) as long as all items are identifiable. 
• A DTC warehouse has a heavier focus on areas for picking and packing individual items. B2B warehouses will have space for forklifts with pallets of product to maneuver easily.

Shipping

• DTC fulfillment relies more on shipping carriers to deliver products in a timely manner. Many consumers expect their items to arrive in less than 3 days, so it is important to have efficient processes in place. 
• B2B fulfillment requires scheduling freight to pick up and deliver the orders within a specific window of time. A lack of detailed planning and missed shipments can be detrimental to a 3PL's relationship with wholesale companies. 

Process Requirements

• DTC orders tend to have more value-added service add-ons, such as kitting and subscription boxes. There also tends to be a higher opportunity for fulfillment error due to the higher volume of orders being picked, packed, and labeled. 
• Wholesale warehouses will have to adhere to strict compliance and documentation requirements. They will typically be expected to have an electronic data interchange (EDI) enabled warehouse to reduce human error in shipping paperwork. 

What is a hybrid warehouse?

You might be wondering, do all warehouses focus solely on one type of fulfillment? The answer is no; a warehouse can handle both B2B and DTC orders. A hybrid warehouse will have a warehouse management system (WMS), technology, and labor plan that can handle fulfilling large wholesale orders along with a high volume of unique DTC orders. This can be logistically complex and requires detailed planning, but is beneficial for 3PLs and brands alike. 

Numerous companies operate in both B2B and DTC markets, enabling a hybrid warehouse to store and fulfill all their inventory needs. Some companies currently focus only on DTC sales, but are thriving and aim to expand into the wholesale market. A warehouse that has the capabilities to fulfill both B2B and DTC orders encourages brand growth and evolves with companies as they grow into new markets. 

B2B and DTC fulfillment face unique and different challenges, but have the ability to coexist in a hybrid warehouse.