When brands embrace the Direct-to-Consumer (DTC) model, the excitement of connecting directly with customers often masks underlying tensions with traditional distributor networks. Issues like inventory ownership, cash flow, and invoicing logic can quickly escalate into conflicts. These challenges aren’t isolated incidents but growing pains of an industry in transition. The critical question remains: How can brands and distributors achieve collaborative success amid complex organizational structures and multi-tiered roles? ShopeX offers a solution.
From Solo Play to Team Strategy: The DTC Transformation
Traditional B2B models framed brands and distributors as simple buyer-seller relationships. The DTC era demands a reinvention. Leading brands are now pioneering a “brand-led, distributor-empowered” approach, transforming distributors from mere channels into service partners—jointly building an omnichannel ecosystem centered on consumers.
- Brands take charge of DTC channels (flagship stores, livestreams, mini-programs), unified cloud inventory, and supply chain resources. They retain control over product ownership and user data while focusing on brand building and customer experience.
- Distributors evolve into localized service providers, handling warehousing, last-mile delivery, installation, and after-sales support—leveraging their regional expertise for personalized service.
This model upgrades transactional relationships to collaborative partnerships, with brands overseeing strategy and distributors deepening local engagement. Yet the path isn’t without obstacles. Equitable profit distribution, accurate accounting, and performance measurement remain pivotal challenges. The core questions: How to calculate shared value? How to allocate revenue fairly? How to measure contributions objectively?
The OMS Solution: Resolving Multi-Party Settlement Complexities
ShopeX’s digital platform establishes a transparent settlement system, resolving multi-stakeholder coordination issues and shifting brand-distributor dynamics from competition to collaboration.
1. Unified Inventory and Drop Shipping: Breaking Down Silos
Brands manage centralized cloud inventory while distributors sell via platforms like Tmall or Douyin. Orders ship directly from brand warehouses or local stock—eliminating channel barriers and boosting efficiency.
Settlement Mechanics:
- Value clarity: Systems track order origins—distributors earn price margins (retail minus wholesale), while brands cover logistics costs per agreement.
- Precision accounting: Automated settlement modules generate invoices and rebate calculations, removing manual errors.
- Performance visibility: Multi-dimensional reports analyze sales velocity and channel contributions, refining incentive strategies.
2. Multi-Tier Organizations: Granular Financial Control
Brand ecosystems often involve headquarters, regional branches, and retail outlets—each requiring independent accounting, compounded by hybrid models like group buying.
Settlement Mechanics:
- Value clarity: Balance tracking and credit systems manage accounts, with invoice controls ensuring accurate large-client settlements.
- Precision accounting: Multi-entity architectures assign dedicated settlement accounts, automatically logging cross-tier transactions.
- Performance visibility: Headquarters monitor real-time sales and cash flow across tiers for transparent evaluations.
3. National Sales, Local Fulfillment: Bridging Digital and Physical
Brands attract nationwide orders via livestreams, while local distributors handle measurements, delivery, and installation—blending digital reach with on-ground service.
Settlement Mechanics:
- Value clarity: Brands retain digital marketing revenues; distributors earn service fees, with location-based profit sharing post-platform deductions.
- Precision accounting: Integrated sales-OMS-distributor systems automate payments from consumer to brand to distributor, aligning cash flow with invoicing.
- Performance visibility: Brands assess regional conversion rates; distributors quantify incremental gains from centralized marketing.
4. Cloud Stores and Instant Commerce: Meeting On-Demand Expectations
Brand-operated O2O platforms let distributors list products for express delivery or in-store pickup—expanding reach while satisfying immediacy.
Settlement Mechanics:
- Value clarity: Stores keep product revenue; platforms collect service fees; couriers receive delivery payments—clearly defined splits sustain motivation.
- Precision accounting: High-frequency multi-party transactions process automatically, with compliant audit trails reducing operational risks.
- Performance visibility: Brands evaluate distributor conversion rates and service metrics; distributors access performance dashboards for optimization.
Four Pillars of Collaborative DTC Success
ShopeX’s settlement system delivers foundational capabilities:
- Multi-tier financial clearing: Virtual accounts for brands, distributors, and third parties ensure secure, efficient fund flows.
- Rules-based automation: Configurable splits (by region, product, promotion) trigger instant post-order calculations.
- Deep business integration: OMS and B2B/DMS linkages guarantee settlement data reflects actual transactions.
- Transparent data governance: Credit management and full-cycle reporting foster trust through visibility.
The Future: Symbiosis Over Supremacy
DTC isn’t about eliminating distributors but digitally redefining roles—brands amplify customer connections and supply chain synergy; distributors intensify localized service excellence. ShopeX’s “digital settlement platform” creates fairness through operational transparency, automated rules, and data clarity. This transforms adversarial dynamics into symbiotic partnerships, ultimately advancing consumer-centric omnichannel experiences. In China’s market, DTC’s essence lies in digitally empowering distributors to jointly reach and serve every customer—the true path to mutual success.