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Accurate 1095-C forms: A Primer

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Truth is: The Affordable Care Act (ACA) reporting requirements are burdensome. Getting your 1095-Cs right can be stressful. Integrity Data’s Compliance team, in the trenches since 2012, has put together this primer to help you ensure you have accurate 1095-C forms.

Lines – Lines – Lines: What do they mean?

Line 14 – Offer of Coverage

Line 14 on the 1095-C form provides details of the coverage that was offered throughout the year, including:

  • Whether or not health insurance was offered.
  • The type of coverage that was offered.
  • The months in which coverage was offered.

The code on line 14 may vary as to the quality of the coverage offering. A line 14 response is reported for each month of the year. Also, line 14 codes do not indicate what coverage the employee enrolled in, instead the codes indicate what coverage was offered to the employee. You can use a code that indicates coverage if the employee was offered coverage for every day of the month. If the offer of coverage was not good for every day of the month, 1H will be applicable.

*Line 14 does NOT indicate whether coverage was accepted. That information is reported on Line 16.

**In the above example, the employee had the same coverage available for the entire year, so the response is listed only once, at the top of the column. If the available coverage changed during the year, a separate response would be entered for each month. *Please review this KB article for detailed descriptions of each line 14 code.

Line 15 – Employee Required Contribution

Line 15 provides the amount of the employee required monthly contribution. The amount listed on line 15 may not be reflective of the medical plan cost that the employee actually enrolled in. This amount should represent the cost for the lowest-cost, self-only coverage offered to that employee.

Line 15 should only be populated if line 14 has a code of 1B, 1C, 1D, 1E, 1J or 1K. If one these codes is listed in the “All 12 Months” column on line 14, there should also be a line 15 entry for all 12 months as well. If line 14 does not have one of these codes for any given month(s), line 15 should be left blank for that month. *Please review this KB article for additional details on line 15.

Line 16 – Eligibility

Line 16 provides information about the employees’ eligibility for health coverage and the coverage status for each month of the calendar year. Similar to line 14, a coverage code can only be used if the employee was actually enrolled for every day of the month. Otherwise, a different code will need to be used.

*Please review this KB article for detailed descriptions of each line 16 code.

Part III – Covered Individuals

Part III is only required to be populated by employers with self-insured health plans. Therefore, if your plan is fully-insured, this section will not be populated. This section should list the employee and all of their covered dependents during the calendar year. If the individuals were covered all 12 months, there should be an “X” in column (d). Unlike Part II, if the individuals were not covered all 12 months, but were covered at least one day during any given calendar month, there will be an “X” in the corresponding month(s).

Most Common 1095-C Coverage Scenarios

Full-Time Employee: Enrolled All Year

In this example, the employee was offered & enrolled in a minimum essential coverage plan with minimum value for all twelve months AND the lowest-cost, self-only plan cost increased in the month of June due to it being a mid-year plan.

  • Line 14 - Code 1E is used in this example because MEC coverage providing MV was offered to the employee, spouse and dependents.
  • Line 15 - Should show the employee share of the monthly cost for the lowest-cost, self-only coverage.
  • Line 16 - Code 2C should be used because the employee elected coverage.

Full-Time Employee: Waived Coverage All Year

In this example, the employee was offered coverage at the beginning of the plan year (i.e. January) and chose to waive the offer of coverage.

  • Line 14 - Code 1E is used in this example because MEC coverage providing MV was offered to the employee, spouse and their dependents.
  • Line 15 - Although the employee waived coverage in this example, the employees’ monthly share of the lowest-cost self-only coverage offered still must be populated.
  • Line 16 - Code 2F is used because the employee waived coverage and the employer is using the W-2 safe harbor to determine plan affordability.

Newly Hired Designated Full-time Employee: Waiting Period Applies

In this example, the full-time employee, expected to work more than 30 hours per week, was hired on May 5th and is eligible for coverage at the first of the month following date of hire (i.e. June 1st). The employee chose to enroll herself and dependents in the self-funded plan.

  • Line 14 - Code 1H (No Offer of Coverage) is used for the months the employee was not employed. Code 1E is used during the months that the employee became eligible for coverage and MEC coverage providing MV was offered to the employee, spouse and dependents.
  • Line 15 - The employees’ monthly share of the lowest-cost self-only coverage offered only needs to be populated for the months the employee was eligible for coverage.
  • Line 16 - Code 2A is used for the months the employee was not employed. Code 2D is used for the month that the waiting period applied. Code 2C is used for the months that the employee was enrolled in coverage.

Full-Time Employee Enrolls in “Qualifying Offer” Plan

In this example, a full-time employee was hired on April 15th and was offered a “Qualifying Offer” plan upon completing the waiting period. So the employee was eligible to enroll on the first of the month following 30 days (i.e. June 1st). The 1095-C form should be coded as follows:

  • Line 14 - Code 1H (No Offer of Coverage) is used during the months the employee was not employed. Code 1A (Qualifying Offer) is used during the months that the employee was eligible for the “Qualifying Offer” plan.
  • Line 15 - No amount needs to be listed since Code 1A is used on Line 14.
  • Line 16 - Code 2A is used for the months the employee was not employed. Code 2D is used for the months that the waiting period applied. Code 2C is used for the months that the employee was enrolled in coverage.

Part-Time Employee Moves to Full-Time Position

In this example, a part-time employee was promoted to full-time benefit eligible position on August 10th with coverage starting first of the month following 30 days. After completing the waiting period, the employee chose to enroll in benefits as of October 1st.

  • Line 14 - Code 1H (No Offer of Coverage) is used for the months the employee was not eligible for coverage. Code 1E is used during the months that the employee was eligible for coverage.
  • Line 15 - The employees’ monthly share of the lowest-cost self-only coverage offered only needs to be populated for the months the employee was eligible for coverage.
  • Line 16 - Code 2B is used for the months that the employee was part-time. Code 2D is used for the month(s) that the waiting period applied. Code 2C is used for the months that the employee was enrolled in coverage.

Eligible Employee Elects Coverage Mid-Year

In this example, a full-time eligible employee hired on February 1st was eligible for coverage starting March 1st and chose to waive coverage upon completing the waiting period in March. However, the employee got divorced on May 15th, which is considered a qualifying event, and chose to enroll herself and her children in the company’s self-funded plan effective June 1st.

  • Line 14 - Code 1H (No Offer of Coverage) is used during the months the employee was not employed/not eligible for coverage. Code 1E is used during the months that the employee was eligible for coverage and MEC coverage providing MV was offered to the employee, spouse and dependents.
  • Line 15 - The employees’ monthly share of the lowest-cost self-only coverage offered only needs to be populated for the months the employee was eligible for coverage.
  • Line 16 - Code 2A is used for the months that the employee was not employed. Code 2D is used for the month(s) that the employee was in a Limited Non-Assessment Period and the waiting period applied. Code 2H (Rate of Pay Safe Harbor) is used for the months that the employee waived coverage. Code 2C is used for the months that the employee was enrolled in coverage.

*Please note that code 2C is not used in May because the employee did not get divorced until May 15th. Since the employee was not enrolled in coverage for every day of the month of May code 2C cannot be used.

Terminated Employee

In this example, a full-time employee was enrolled since the beginning of the plan year (i.e. January 1st), and then ended their employment with the company on August 15th. Coverage terminates on the day of termination.

  • Line 14 - Code 1E is used for the months that the employee, spouse and dependents were eligible for MEC coverage providing MV. Code 1H is used for the months in which the employee was no longer employed, thus there was no offer of coverage.
  • Line 15 - The employees’ monthly share of the lowest-cost, self-only coverage offered only needs to be populated for the months the employee was eligible for coverage.
  • Line 16 - Code 2C is used for the months that the employee was enrolled in coverage. Code 2A is used for the months the employee was not employed.

** Please note that the employee will not have a coverage code on lines 14 or 16 in this example, because coverage terminated mid-month. Therefore, the employee was not covered for every day of the calendar month.

Employee Elects COBRA upon Termination **Self-Insured Plans Only**

In this example, the full-time employee terminated their employment in July and COBRA was offered to the employee, spouse and dependents. The employee enrolled in COBRA starting in August and remained on COBRA for the remainder of the calendar year. The form example below would also apply to an employee who continued coverage as a retiree.

  • Lines 14/15/16 - The codes will be identical to that of a regular terminated employee (see example above).
  • Part III - This section should indicate which months the employee and/or dependents were enrolled in the employer’s health plan and COBRA. The “Covered All 12 Months” box is checked because the employee was enrolled in the employer’s medical plan from January –July, then immediately elected COBRA in August and remained on COBRA through the end of the year. Therefore, the employee was enrolled in coverage all twelve months. Please see example below:

* COBRA only needs to be reported by employers with self-funded health plans.

Employee Terminated in Prior Year – Enrolled in COBRA All Year **Self-Insured Plans Only**

In this example, an employee terminated their employment in 2017 and elected COBRA. This employee has remained enrolled in COBRA for all twelve months of 2018. The form example below would also apply to an employee who continued coverage as a retiree:

  • Line 14 - Code 1G (Offer to Non-Employee). * Code 1G applies for the entire year or not at all.
  • Line 15 - Should be blank.
  • Line 16 - Should be blank.
  • Part III - Should be completed for each enrollee. Keep in mind that this section must be completed for non-employees as well.

Employee Enrolled in Union-Sponsored Plan

In this example, the employee was enrolled in a medical plan that is 100% administered by the union:

  • Line 14 - Code 1H (No Offer of Coverage). This code is used because the Union is actually offering the plan, not the employer.
  • Line 15 - Should be blank.
  • Line 16 - Code 2E (Multi-employer Interim Rule Relief).

Variable Hour Employee Completes IMP and Becomes Eligible for Coverage

In this example, a newly hired variable hour employee averaged over 30 hours per week during their Initial Measurement Period. There was no waiting period, the employee was eligible first of the month following the completion of the IMP.

  • Line 14 - Code 1H (No Offer of Coverage) is used during the months the employee was in an IMP. Code 1E is used starting the month the employee is enrolled in coverage.
  • Line 15 - The employees’ monthly share of the lowest-cost, self-only coverage offered only needs to be populated for the months the employee was eligible for coverage.
  • Line 16 - Code 2D is used during the months employee was in the IMP, Code 2C is used starting the month the employee is enrolled in coverage.

Be sure to follow our blog for more detailed information on all things ACA. Need more help with accurate 1095-C forms? Contact us today!


Hardware station installation and configuration | D365 for Retail

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Hi Guys, Hope you are RetailDAXing. You might have read my earlier blog on Modern POS Installation on Windows Laptop .  In this blog, I would like to give you a brief walk-through on the installation and...(read more)

How to create Cue tiles for fetching Pending approvals in a workflow in NAV?

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Hey Readers! Thanks for stopping by. Hope you like my blog. Introduction: In an approval process, approval is sent to a designated person. The person is notified via email also he/she can view the...(read more)

Generate symbol reference for AL per single object.

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Hello Team! I know that changing standard objects and creating new with C/AL is bad, but sometimes we have to do it. For example - changing function visibility from local to external or using .Net variables...(read more)

Dynamics 365 App Designer - Web Interface is going to be / already deprecated?

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In version 1710 (9.0.2.2279) of Dynamics 365 Online we get this dialog to create a new app… As you can see it contains the Client options Web and Unified Interface. After an automatic minor update to the...(read more)

How to Add Senders to Your ‘Safe Senders’ List with Different Email Clients

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How to WhiteList Email Senders

Are you having trouble receiving emails from the newsletters or senders you subscribe to?

It’s a possibility these emails are inadvertently being sent to your spam or junk email folders without your knowledge.

When you want to stop having these emails stuck in your spam or junk folders, follow these instructions to add senders to your “Safe Senders” list in a variety of email clients:


Outlook

When you have 2003, 2007, and Express without an email address example available in your inbox:

  1. Select “Actions” from your toolbar at the top of your screen
  2. Select “Junk E-mail”
  3. Select “Junk E-mail Options”
  4. Click on the “Safe Sender” tab
  5. Click “Add”
  6. Type in the email address that you want to add to your “Safe Sender” list – for example, at Ledgeview you would type in “@ledgeviewpartners.com”
  7. Click OK

When you have Outlook 2010:

  1. In Outlook, click on the “Home” tab
  2. Click “Junk”
  3. Select “Junk E-mail Options” from your drop-down menu
  4. Visit the “Safe Senders” tab
  5. Type in the email address or domain name that you wish to add
  6. Click OK

When you have Outlook 2013:

  1. In Outlook, click on the “Home” tab
  2. Click “Junk”
  3. Click “Junk Email Options”
  4. Click on the “Safe Senders” tab
  5. Click “Add”
  6. Type in the email address or domain name you wish to add
  7. Click OK

When you have Outlook Express:

  1. In Outlook, navigate to your “Tools” menu
  2. Click “Address Book”
  3. Click “New”
  4. Select “New Contact” from your drop-down menu
  5. Type in the email address you wish to add
  6. Click OK

Gmail

  1. Select “Contacts” from the Options side of Gmail, on the left-hand side of your inbox
  2. Select “Create Contact” from your Top Menu
  3. Enter the email address in your Primary Email Box
  4. Click Save

AOL

There are many versions of AOL out there, but we are covering WebMail, which you can access via your browser, for the purpose of this post.

Here’s how to add a sender to your whitelist using the application:

  1. Open your WebMail
  2. Click on a Sender’s name or email address
  3. Click “Add to Address Book” in the pop-up window that appears
  4. Click Save

With most of the options listed, you can add additional information about your contact once you click “OK” or “save”.

This all depends on the application and what information you want to store about your senders.

If your email client is not listed above, and you are still having trouble adding someone to your “Safe Senders” list, a quick web search that is something like: “How to add a sender to my Safe Senders list in (email client name)”, should do the trick!

To ensure you are receiving emails from Ledgeview Partners, we always recommend you follow these instructions.

Add “@ledgeviewpartners.com” to your “Safe Senders” list, whatever email client you are using, so you don’t miss content like this!

Subscribe to our blog when you visit the main feed and click “subscribe”.

Ledgeview Partners

4 Initial Takeaways from the 2018 #UserGroupSummit

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Ledgeview Partners

This year’s User Group Summit brought together over 6,000 people, including users, partners, sponsors, experts, and Microsoft Dynamics 365/CRM MVPs.

The summit, sponsored by CRMUG, was a successful, informational, and collaborative event that is sure to be discussed and celebrated until next year’s User Group Summit in Orlando, FL from Oct. 13, to 18, 2019.

Depending on which track you followed, or the role you had while attending the summit, your key takeaways will likely vary.

Within this post, the Ledgeview team shares some key takeaways they had from this year, amid working a busy exhibit hall and hosting many exciting educational sessions.

These takeaways are important to keep in mind, whether you had the chance to attend the conference or not, as they highlight upcoming innovations, updates, and important happenings in the Microsoft Dynamics 365/CRM universe.

Here’s what you should know …


1. PowerApps are powering the future of Microsoft Dynamics 365/CRM
PowerApps are here, indeed, and here to stay and evolve.

The use of them and how many are deployed in production environments has sky-rocketed in the recent past. Much of the conversation at the 2018 User Group Summit was dominated by this topic.

Innovative CRM partners, like Ledgeview, will be making better use of PowerApps moving forward with their customers in order to deliver the most effective solutions.

Along with PowerApps, the term Power Platform was widely used throughout the conference, which is a set of applications that can automate almost any process.

The Power Platform includes the following Microsoft Dynamics tools:

  • Microsoft Flow: an enterprise workflow engine that can connect to hundreds of third-party applications
  • Power BI: a reporting platform that can pull data from hundreds to thousands of data sources
  • Common Data Model: a data model that can be utilized to link data together, making it easier to build PowerApps, create Reports, and integrate data

2. Utilizing key CRM resources is extremely effective when it comes to an organization’s success
Through having the chance to speak to many users at the conference, Ledgeview heard time and time again, how valuable it is to them, to have key CRM resources available.

This is why we’re happy to provide you with the tools you need to succeed, whether it’s eBooks, infographics, blogs, videos, on-demand webinars, demos, etc.

Here are some key materials that may benefit you looking at the future success of your CRM system, whatever phase you’re in:


Ledgeview Partners

3. Seeing what’s possible to extend Microsoft Dynamics 365/CRM to transform your whole business
At the 2018 User Group Summit, users likely discovered more ways to use Microsoft Dynamics 365/CRM to meet almost any of their business needs.

While the concept might not work for the “average” business, the art of the possible is always exciting to see come to life, and it certainly wasn’t missed at this year’s summit.

This is a huge investment, and could encompass anything from Adobe Marketing Cloud, to LinkedIn Sales Navigator, to Office 365, to Power BI, to Dynamics 365, and beyond.

This makes a good case for the concept of utilizing PowerApps more comprehensively. It’s not just about one system. It’s about the bigger picture, and what it means for your bottom line.


4. User adoption is still the number one struggle most businesses report to their partners
If you are among the crowd of users and organizations struggling to achieve high, continuous user adoption, we recommend taking advantage of the many resources Ledgeview has on the subject.

There’s a lot to cover, but, rest assured– achieving high, continuous user adoption is possible, and you aren’t the first or last organization to experience this, often, ongoing problem.

If you need help gaining high continuous user adoption, reach out to Ledgeview for support. Our experts can help guide you every step of the way.


At Ledgeview, we’re thrilled to be a part of your CRM journey.

Contact us when you need help with your CRM project, and learn more about our CRM Consulting Services here.

Contact Ledgeview Partners

Audit Information not getting retrieved using SSIS/KingswaySoft Adapter

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A few days back I wrote about how we can use CDS/CRM Source component of KingswaysSoft Adapter to get the audit information. https://nishantrana.me/2018/10/08/using-kingswaysofts-cds-crm-source-component...(read more)

MB6-898 Describe the user interface components of Dynamics 365 for Talent

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Dynamics 365 Button – With the Dynamics 365 button you can switch between different Dynamics 365 apps. Such as Attract, HR Core and Onboard. Vafle menu  is where you easily can navigate to your other...(read more)

Dynamics 365 Business Central: handling breaking schema changes on production

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I saw many requests on forums in the last days related to one of the most noisy topic when working with Extensions in Dynamics 365 Business Central (SaaS version): how to handle breaking schema changes...(read more)

Hands On with Microsoft Dynamics GP 2018 R2: Install Web Client Resource Cache

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Microsoft Dynamics GPMicrosoft Dynamics GP 2018 R2 was released on the 2nd October. In this series of posts, I’ll be going hands on and installing the majority of the components; some of them, such as Analysis Cubes for Excel, which are little used, I won’t be covering.

The series index will automatically update as posts go-live in this series.

There is one final, optional, step in installing the web client, which is to install the Web Client Resource Cache on each session host. To install it, launch the setup utility and, under Additional Products, click GP Web Resource Cache:

Setup Utility

Click Install to begin the installation:

Welcome

When the installation is complete, click Finish:

Installation Complete

Click to show/hide the Hands On with Microsoft Dynamics GP 2018 R2 Series Index

Read original post Hands On with Microsoft Dynamics GP 2018 R2: Install Web Client Resource Cache at azurecurve|Ramblings of a Dynamics GP Consultant

Microsoft Dynamics GP 2018 R2: Option Not to Show Inactive Checkbooks in Lookup Windows

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With the release of Microsoft Dynamics GP 2018 R2, users can choose to exclude 'Inactive Checkbooks' in the Checkbooks Lookup window. In prior versions of Microsoft Dynamics GP, all Checkbook...(read more)

How to Show the Survey Response of a Survey for a Particular Entity using VOC in Dynamics 365

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Introduction: As we know that, VOC is an Add-on in Dynamics CRM online that allows the creation of customer surveys, these surveys could then be sent out to determine the level of customer satisfaction...(read more)

"Git" going with extensions

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We recently announced the availability of the ALAppExtensions repository on GitHub. The repository enables our partners and customers to collaborate with Microsoft, or other partners, to develop extensions...(read more)

Advanced Dynamcis 365 JavaScript Development: Giveaway ends today. Shopping cart opens tomorrow

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Hi Everyone, The giveaway for free tuition for the Advanced Dynamics 365 JavaScript Development course ends at 7:00pm CDT tonight.  If you have not entered, you still have time. The shopping cart opens tomorrow (Saturday) and will be open until Friday evening, 2 November. Everyone who puchases the course will receive their first module on Saturday, […]

VIDEO: one click from Word Template to PDF attached to an Email

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Implementing Jet Reports: Management Reporter vs. Jet Reports

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Jet ReportsThe vast majority of my clients are users of Management Reporter, when implementing Jet Reports, one of the key areas, which needs to be discussed, is how Management Reporter compares to Jet Reports.

Fortunately some work has already been done in this area by MVP Belina Allen, the GP CSI. She has done a series of videos on Management Reporter versus Jet Reports.

Below are links to the playlist of all videos as well as links to the individual videos:

  1. Playlist containing all of the below videos
  2. Excel Add-On: An Introduction – Management Reporter vs. Jet Reports
  3. Building Rows – Management Reporter vs. Jet Reports
  4. Building Columns – Management Reporter vs. Jet Reports
  5. Building Trees – Management Reporter vs. Jet Reports
  6. Report Definition – Management Reporter vs. Jet Reports

If you’re a Management Reporter user who is implementing Jet Reports, I’d encourage you to take the time to watch Belinda’s videos.

Click to show/hide the Implementing Jet Reports Series Index

Read original post Implementing Jet Reports: Management Reporter vs. Jet Reports at azurecurve|Ramblings of a Dynamics GP Consultant

Kansas City PowerApps and Microsoft Flow User Group

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The inaugural meeting of the Kansas City PowerApps and Microsoft Flow User Group was held on October 25th at the Microsoft Office in Overland Park. There were 22 enthusiastic attendees. Audrie Gordon, PowerApps Community Manager and Jon Levesque, Flow Community Manager joined us remotely and help kick off the meeting.

There was a Microsoft Flow presentation demonstrating practical, quick win uses of Flow with Flic.io buttons, Out of Office Messaging, Selfie Twitter, Location Reporting with Trigger Tokens and more. Also there was a presentation on Logic Apps and and a short intro on building custom connectors.

The group decided to meet quarterly and keep both products in one group.

Kansas City PowerApps and Microsoft Flow User Group

The post Kansas City PowerApps and Microsoft Flow User Group appeared first on CRM Innovation - Microsoft Dynamics 365 Consulting and Marketing Solutions.

How to measure the performance of the Dynamics AX 2012 forms

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When users complain about the performance of the system, sometimes it’s a challenge to measure the performance of the forms. If you want a quick measurement for what forms a user is using in the AX Client and tracking the form events triggered in the form (open, close), at what time, computer name, duration in...

How Manufacturers and Distributors Can Both Benefit from D2C Sales

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It’s been argued that B2B and B2C are dead (or that they should be), and that we should be evolving toward B2B2C and D2C (direct-to-consumer) sales for more customer-centric strategies.

It seems that —especially lately— B2B organizations are taking note.

For quite some time now, the rise of D2C sales has been observed, but it’s primarily been posed as a threat to distributors and a game-changing opportunity for manufacturers.

However, that doesn’t have to be the case.

 

Quick Look: How D2C is Impacting the Supply Chain

 

By now, many manufacturers have already begun to cut the middle man —the distributor or retailer— out of the supply chain and the e-commerce equation. But they’re not doing it entirely for the sake of the customer.

So then, why?

When it comes to value distribution within the supply chain, distributors make a significant cut of profits and third-party retailers often mark up the price of goods by up to 50% or more. By executing D2C sales, manufacturers reap the full profit margin themselves.

 

Let’s visualize this.

 

Here’s what the traditional value chain looks like (distributed relatively evenly across channel partners):

 

And here’s what it looks like in D2C:

 

 

This looks great – at least for manufacturers.

But there’s a fix: a win-win solution in D2C for manufacturers and distributors alike that’s often overlooked.

Here’s a hint: it’s customer-centricity.

 

What’s the State of D2C Sales in 2018?

 

Last year, over a third of B2B consumers bought directly from a brand manufacturer’s web site (citing convenience, product quality and shipping as primary motivators).

As customers’ expectations of e-commerce continue to grow, the rise of D2C sales is expected to follow suit. (And the data in our latest research report supports this claim).

 

 

This year, we found that 61% of B2B businesses have seen evidence that manufacturers, distributors and wholesalers within their supply chain have started selling direct-to-consumers. Of those, 64% expect to see that trend continue.

And they’re not wrong.

  • Forbes predicts that the number of manufacturers selling directly to consumers will grow 71% this year alone.

  • 81% of US e-commerce customers expect that they’ll make at least one purchase from a D2C brand within the next five years (eMarketer).

    • 33% expect that at least 40% of their purchases will be made through D2C companies within that timeframe.

 

The opportunity is certainly ripe, but the conversation around D2C sales remains misinformed.

Here’s a breakdown of how both channel partners — distributors and manufacturers alike— can reap the benefits of D2C sales:

 

The Advantages of D2C Sales for Manufacturers

 

We’ve already covered one of the more obvious benefits for manufacturers going D2C: bigger profit margins.

But beyond revenue share, D2C manufacturers are also being given the opportunity to take ownership of valuable aspects of e-commerce, including customer experience, data, and business-to-consumer relationships.

In fact, thanks to D2C sales, 82% of manufacturers selling directly to consumers improved their customer relationships, and 76% improved customer experience.

And this should be the focus of D2C: your customers.

Keeping this in mind is how distributors can benefit from manufacturers’ shift toward D2C sales as well.

 

How Distributors Win (Too) on the D2C Battlefield

 

In D2C, revenue is typically the major benefit taken into consideration when assessing a successful business model. But there is so much more value to be gathered from D2C sales (especially regarding a better customer experience, and the critical customer data needed to make that a reality).

Distributors continue to be considered the losers in the D2C equation, but there are many ways they can thrive.

 

Here’s how distributors can take advantage of a D2C sales model (Fidelitone):

  • Almost half of manufacturers said direct-to-consumer sales increase brand awareness and have boosted leads for their channel partners, including distributors.
  • 54% of manufacturers said both they and their channel partners saw growth in sales as a result of a D2C model (by funneling order fulfillment for larger orders through to distributors and retailers).
  • 27% of distributors feel that by letting the manufacturer fulfill orders for lower-volume inventory items, they can focus on items that yield the best profitability.
  • 14% of distributors see a benefit in letting the manufacturer test the success of new products before passing them along to retailers.

 

In summary: D2C sales do drive more revenue.

But more importantly, it gives manufacturers and distributors alike access to invaluable customer data. It gives them both the ability to serve customers in the easiest, most convenient way. It allows customer relationships to blossom and boosts brand awareness. It gives channel partners within the supply chain the ability to experiment with what works best for their customers —not just what works best for them.

And with an investment in e-commerce, this can be even easier.

 

Improving D2C Sales with an E-Commerce Investment

 

Though there does seem to be a bit of a tug of war when it comes to winning customers on the manufacturer and distributor side, the key to success is not to consistently be the channel of choice, but to optimize all options for customers, so they are satisfied regardless of where they choose to purchase.

Why?

Before a buyer even contacts a potential supplier, they’ve already completed as much as 70% of the buying process (beginning largely with online research). This means that not only does the e-commerce experience need to be strong, but organizations throughout the supply chain need to maximize that last 30% of the buying process for customers who are already hyper-informed.

Investing in e-commerce has already made D2C sales possible for 49% of businesses. Another 24% plan to be able to in the future. They also have been able to create additional revenue streams and expand their business model as a direct result of investing in an e-commerce platform.

 

Here's How You Can Get Started:

 

If they can get D2C e-commerce right, manufacturers have a huge opportunity to drive up their profit margin, while distributors have a $6.6 trillion opportunity at stake.

If you’re not sure where to start, here’s our advice: prioritize your customers’ experience —across channels and in all phases of the buyer journey— to have the biggest impact on your bottom line without having to fight for your share of the profits.

Invest in e-commerce now, and invest in what you’ll need to succeed long-term; it’ll pay to be prepared when the next disruptor comes along.

For more on how changing business models and competitive threats are impacting the supply chain in 2018, download our research report:

 

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