DCEC Cylinders works with aluminum bottle and gas cylinder distributors to help them control and stabilize their sales channels to protect brand value. There is a significant negative impact on B2B pricing caused by direct sales into B2C markets. Direct sales are attractive for some aluminum cylinder manufacturers, but they cause unstable markets with unreliable and unpredictable demand cycles.
How do direct sales from aluminum cylinder manufacturers into B2C markets impact market pricing?
Direct sales from aluminum cylinder manufacturers into B2C markets, including direct to consumer and direct to small shops and online retailers, can seem like an easy path to increased profit. Online markets and digital channels advertise a model for direct sales that looks very simple. Build a retail website and promote it, use online retail channels, and improved sales and profit seem to be guaranteed. The impact of this on market pricing, however, creates problems for all market participants.
What are the 4 most significant direct sales issues for aluminum cylinder manufacturing?
- Distributors help maintain pricing stability
- Direct sales have a negative impact on brand value
- B2C marketing is not a manufacturing role
- Direct sales reduce investment in product development
How does pricing stability protect brand value
Many major brands have discovered that Direct to Consumer (DTC) strategies do not deliver the benefits they anticipated, and have switched their focus back to building better dealer relationships and networks. There are several good reasons for this. The most significant are issues with pricing stability and protecting brand value. Price instability impacts brand value by changing the perception of market position by customers, making it difficult to maintain a premium on brand quality and actual value.
How do direct sales of aluminum cylinders affect brand value?
Once perception of brand value has been lost it is extremely difficult to restore it. There is a known impact on baseline pricing that is caused by promotional discounting, and this reduces future income. Aggressive marketing from direct sales of aluminum cylinders leads to heavy discounting, which has a strongly negative effect on perception of brand value. This perception becomes a reality when margins are cut and brands need to find ways to reduce manufacturing costs, switching to lower quality materials and finishing.
Why are distributors essential for maintaining pricing stability?
The reality of direct sales is much more complicated and difficult to predict. Direct sales into B2C markets by aluminum bottle and gas cylinder manufacturers causes pricing instability and quickly reveals the essential role of distributors and dealers in balancing supply and demand. Distributors help to maintain a consistent, balanced, supply of products across pricing targeting different market segments, which reduces the pressure on retailers to discount overstock to improve cashflow.
What is the impact of direct sales on aluminum cylinder product development?
The impact of direct sales on aluminum cylinder product development can be severe, preventing innovations into new markets and inhibiting response to competing innovations that can destroy your existing market. Price instability from direct sales reduces the capability of brands and manufacturers to build new products from retained income, because of the uncertainty over cashflow.
How can aluminum bottle & cylinder manufacturers work with distributors to stabilize markets?
Aluminum bottle and cylinder manufacturers can play a significant role in maintaining market stability and appropriate pricing for all market participants by working closely with distributors and brands to ensure that the supply chain is aligned correctly, from manufacturers to distributors, and distributors to retailers. DCEC Cylinders works closely with our brands and distributors to maintain stable supply chains and stabilize markets by not selling directly to small retailers or pursuing direct sales into B2C markets.
What are the benefits of aluminum cylinder manufacturers, brands & distributors working together?
There are many benefits that come from aluminum cylinder manufacturers, brands and cylinder distributors working together. At DCEC cylinders, we find that the benefits of a unified approach to design, innovation, supply chain logistics, distribution and marketing strategies create consistent benefits for all participants.
- Security of supply
- Confident financial forecasting
- Improved brand identity
- Better product quality
- Support for necessary customization innovation
Security of supply and confidence in forecasting based on predictable pricing and volume for aluminum cylinder sales are one side of the relationship. Improved brand identity, product quality and innovation are desirable added value benefits that emerge over long-term relationships between manufacturers, brands and distributors.
Aluminum cylinder brand customization helps protect market position
Aluminum cylinders are used for a wide range of purposes, from aluminum bottles for drinks and liquid storage to pressure cylinders for medical and industrial gases, SCUBA tanks, paintball and airsoft cylinders, and high pressure precharged pneumatic (PCP) cylinders for airguns. These all offer opportunities for customization that protects the market position of your brand.
Customization requires investment in research and development that is essential not only to maintain product leadership but to stay competitive and retain the flexibility to adjust to changing market conditions. Without good working relationships between brands, manufacturers and distributors we lose both the financial capability to invest in innovation and also the feedback from customers that gives insight into desirable customization features.
Work with DCEC Cylinders to build mutually successful partnerships
Building stable long-term mutually successful partnerships with your aluminum cylinder manufacturer is not difficult when you are all looking for the same outcomes. We’ve looked at how brand value, cashflow, innovation and stability are all affected by market supply channels, but to put this into action you need to have the right relationship with the right manufacturer.
DCEC Cylinders is the right aluminum cylinder manufacturer for your brand because we focus on the issues that matter in the marketplace. We are committed to building long-term successful partnerships with our OEM and ODM customers across our range of high quality aluminum cylinder products certified to ISO standards. Contact us to discuss how we can work with you to achieve long-term mutually beneficial results.
