Is a direct selling supply chain without retail stores alway

Is a direct selling supply chain without retail stores always less expensive than a supply chain with retail stores?

Solution

Yes, the direct selling supply chain is always less expensive than a supply chain with retail stores. We can take the examples of Amazon and Walmart. even though is making a profit in their business they cannot compare their ROI with that of Amazon. Amazon just builds the warehouses to store and pack the goods for shipping and also build a strong supplier network. They do not have to pay high rent at prime locations in major cities. They just have to manage the shipping and keep the customers happy with quality products.

The same is not the case with Walmart because the company needs to invest in the real estate. They need to build the supplier network and build warehouses for storage. Hire employees to work in the retail stores and the company also need to pay for miscellaneous expenses like electricity and internet in all the retail stores. They need attract the customers with good discounts and they need to rely on both offline and online marketing activities for that, unlike e-commerce or direct selling supply chain. They also have to worry about the inventory and the overheads when they buy gods form the suppliers.

Considering all the above factors it is easy to say that direct selling supply chain is a more feasible option financially.