The Winning Formula for D2C Manufacturers in 2020
As you already know, running a manufacturing business is a tough gig, so when you do look for helpful tips and suggestions, you just want to get straight to the point. That’s why we’ve put together this article on the winning formula for D2C manufacturers in 2020, so you know exactly what you need to get ahead.
We’ve all done it, and there’s no shame in it!
We call into the ether of Google for help, hoping that our search is going to pull up something that’s going to tell us exactly what the formula is to make our D2C manufacturing business a successful one.
The only issue is, even though trends and predictions suggest that manufacturing branding is increasing in popularity, there’s not much out there telling us exactly what we need to make sure our scaling businesses keep growing.
You can see for yourself what searching how to run a successful D2C manufacturing brand on Google turns up.
It’s not that you won’t find any useful information, as most articles will tell you what you should focus on to grow your business.
However, not being set up with the right platforms and proper tools is a big disadvantage that wastes all your hard work.
That’s why we’ve put together an article on the Holy Trinity for manufacturers looking to sell online.
This winning formula for D2C manufacturers consists of getting set up with:
E-commerce platform + Smart Manufacturing Software + Accounting tool = Success
In this article, we’re going to pick apart this winning formula, exploring each of these tools and show you exactly how these three things are the key to unlocking your business’s full potential.
If you want to grow your business, it’s essential to get set-up with these three things, and we’ll give our recommendations and how you’ll use them.
So, without further ado, let’s begin.
Your E-Commerce Platform: Shopify
It’s estimated that 1.8 billion people shop online worldwide, that’s why it's essential to get set-up with an e-commerce platform such as Shopify to take advantage of this opportunity.
To get the most out of becoming a D2C manufacturer, you’re going to need to get your business set-up online.
If you decide to solely sell products online or through a multi channel selling strategy is completely down to you.
But a recent study suggests that global e-commerce sales will reach a whopping $4.8 trillion by 2021, meaning selling online is necessary if you want to take a slice of this lucrative pie.
However, with so many platforms and online marketplaces to sell from, where do you get set-up?
Shopify is an extremely popular e-commerce platform that allows users to quickly and easily set-up their online store, offering services such as payments, marketing, shipping, inventory management, and customer service tools.
Shopify inventory management is important for manufacturers; however, inventory tracking isn’t advanced enough to help you monitor material consumption during production.
But, have no fear! As you can find a solution to whatever the vanilla Shopify platform is missing at the Shopify app store.
The reason we’ve chosen Shopify as your potential e-commerce platform is because of its streamlined functions, the vast amount of Shopify apps, and the freedom it gives you to run your business your way.
PRO TIP: This article aims to give you the best set-up as a scaling manufacturer, but that still means you’ll need to organize your business and manufacturing. Make sure to check out our guide on production planning to develop the smoothest production flow.
Katana Smart Manufacturing Software
Smart Manufacturing Software provides scaling manufacturers with the necessary tools to get more control over their production and inventory.
Katana is an all-in-one MES system built by manufacturers, for manufacturers, looking to get more control over their scaling manufacturing business.
Katana helps manufacturers by giving them the power of automation and by centralizing their entire business onto one, easy to read visual dashboard.
Regardless of where you sell your products or how you manufacture them, finding Smart Manufacturing Software should be the number one priority of any manufacturer, as it is going to give you:
— Automatically calculated manufacturing costs;
— Real-time raw material and finished goods lot tracking;
— Production scheduling software functionality;
— Floor-level control for manufacturing;
— Efficient material purchasing plans; and
— Integration with your favorite e-commerce platforms and accounting software (which we will explore in detail later).
But, not only are these some of the reasons why Smart Manufacturing Software is a crucial ally for nurturing your business’s growth, but it also gives you access to:
The Auto-Booking System
Katana has a unique auto-booking system that automatically allocates your inventory to orders, so you can understand immediately if you can fulfill a sales order, start production, or if you must order more materials.
Complete Production Management
Katana gives manufacturers souped-up tools for their production management. With Katana, you can create manufacturing orders, set tasks for workstations or team members, get automatically calculated deadlines, and easily monitor progress with our intuitive red, amber, green (RAG) systems.
Katana automatically schedules production in the order jobs are created. However, if you wish to focus on a different task, our nifty drag-and-drop feature allows you to reschedule production, and Katana will automatically redistribute inventory and calculate the deadlines for the new workflow.
Adopting Accounting Software
A stitch in time saves nine is a phrase that very much applies to having your business set-up with accounting software.
You may want to delay this until the very last minute, but trust us, the last thing you want is to try and figure out your business's finances at the end of a financial period, which could see you making mistakes and hiring an expensive accountant.
That’s why it's important to find accounting software to help you effortlessly track your finances online.
We don’t have one suggestion of which software you should use, but it does come down to two pieces of software, both that are popular among manufacturers.
Of course, there are some differences between QuickBooks and Xero. However, for the most part, they both perform similar functions when it comes to tracking your business's finances.
Regardless of which software you get set up with, the purpose of it is to help you use your resources efficiently and reduce costs (especially the costs of bookkeeping errors).
How Do the Three Apps Work Together?
Let’s use pop culture to give a quick comparison of how Shopify, Katana, and QuickBooks/Xero work together.
Take, for example, a heist movie, one from the Ocean’s franchise, let’s say. In this movie, you will have a crew comprised of individuals who have a specialty, all working together to break into a bank vault.
On their own, the task would be impossible, but as a team?
This, in a nutshell, is how the three apps work together. To break into success your heist crew is going to be comprised of:
— Shopify: handling your sales;
— Katana: handling your production and inventory, from raw materials to finished goods; and
— QuickBooks/Xero: handling your accounting.
The purpose of having these three is to bring manufacturing process automation into your business. So, you have a smooth and efficient synergy from sales, manufacturing, and bookkeeping.
Don’t panic, this doesn’t mean that you’re going to have to navigate between three different apps, because Katana has been built to integrate with Shopify and your accounting software, so you can access and monitor your entire business, from one dashboard.
So, how exactly does this work?
Once you’ve signed up for Katana, go into “Settings” and select “integrations”
At this screen, you can connect your e-commerce platforms and accounting software to Katana, meaning that your online sales, inventory levels, and customer information will all be synchronized.
Once integrated, your workflow will be something like this:
1. When a customer triggers a sale on Shopify, a sales order (SO) automatically generates within Katana and can be found at the “Sell” screen.
Shopify sales are automatically pushed to Katana, and you can distinguish the difference between your Shopify sales and sales from other channels by the icons on the far-right.
From here, you’ll be able to see if it’s possible to fulfill the SO, generate a manufacturing order, or make a purchase order for more raw material.
2. Let’s say you’re understocked on raw material and need to purchase more. When placing the order for more at the “Buy” screen, you can create a bill in Katana, which will push the bill to your accounting software and your supplier.
When you create a bill it will automatically be pushed to your accounting system. However, if you prefer to edit and approve the document, you can have the bill/invoice saved as a draft instead.
3. Once you’ve received your materials and finished production, back at the “Sell” screen, you can generate an invoice for the customer (like before, it will be pushed to your accounting software and the customer) and mark the SO as delivered once the customer has received it.
Invoices for all your sales, Shopify, and any other, can be easily pushed to your accounting software under the invoice column.
Once the SO is delivered, this will also update your Shopify account, marking the SO as delivered and adjust your Katana and Shopify inventory levels accordingly.
For those of you who are more of a visual learner, be sure to check out the video below to get a better understanding of how Katana’s integration with Shopify, QuickBooks, and Xero will tremendously benefit your business.
Walk With Me is a manufacturer selling on Shopify that makes leather backpacks, shoulder bags, stationery, and accessories. With their designs, they strive for minimalism, utility, fashion, and functionality.
However, they strongly believe that all this shouldn’t come at the cost of the environment and do everything in their power to eliminate unnecessary waste by repurposing materials as much as possible.
During their growth, they realized keeping track of production and inventory in Excel spreadsheets wasn’t going to cut it.
With Katana, Walk With Me managed to:
— Improve raw material inventory control by 65%;
— Improve production planning by 60%; and
— Save time managing day-to-day activities.
Why Are These Apps the Winning Formula to Success?
Getting set-up with Shopify, Katana, and QuickBooks/Xero is going to be essential to your business’s growth as these three apps work together to provide you with:
— Integration and synchronization to keep your sales, inventories, and finances updated in real-time;
— A centralized point of truth that brings all your documents and business information to one, centralized, point of truth via Katana; and
— More time and money from not having to update inventory changes or finances in cumbersome and inefficient spreadsheets.
So, once again, the winning formula your business needs is:
Shopify + Katana + QuickBooks/Xero = Success
With this formula, you can say goodbye to getting lost, juggling between different apps, and best of all, you can optimize your business’s production with Katana’s manufacturing functions.
Don’t believe us? You can see for yourself, as Katana offers a 14-day free trial, so you can experience firsthand how you can get more control with Smart Manufacturing Software.
And, that’s it for today, we hope that you found this article useful and the perfect formula for getting your business onto the fast lane to success!
If you have any questions about how these apps work with each other, please don’t hesitate to drop us a comment below or message us over on social media.
And until next time, happy manufacturing.