Tealeaves’ website allows consumers to purchase tea as well as view promotional short films.

After being introduced to the direct sales model through the Tesla SWOT assignment and having the concept reinforced during Professor Mahesh’s lecture, I was excited to see an article, written by Sauder’s very own Jeff Kroeker, on Tealeaves, a local tea business that adopted a direct sales strategy to adapt to changing market trends after selling’s its luxury tea products exclusively to culinary professionals in the past.  Since the article stated that Tealeaves reaped many benefits through a personalized sales strategy, I started wondering: is there still a future for the “middlemen” of business?

As Professor Mahesh stated, adopting a direct business model brings consumers and businesses closer, subsequently decreasing the risk factor, increasing profit margins, and improving inventory turnover rates. Yet, I think there is, and will always be, demand for physical retailers. Many businesses have embraced e-retailing, but in industries like the accessory, apparel or food industry, many consumers still want to physically see and try products before purchasing them. Anyways, can you imagine not being able to purchase a bag of chips from anywhere but the manufacturer? Additionally, for relatively unknown brands, it is hard to build brand recognition without the presence of a retailer. After all, businesses do not just lose costs by cutting the middleman; they lose the marketing, the salespeople, and the reputation as well. Many startups will not have the $1.5 million budget Teavana had to produce short films to build brand awareness. Therefore, although a direct sales model may be beneficial to many businesses, I think that the presence of retailers is here to stay.