For Amazon FBA sellers and E-commerce business owners

Is The DTC Route Suitable For Your Brand?

Facing intense competition on Amazon? How about growing your sales outside Amazon?

Nov 17, 2021
Macgyver Ng

Helping entrepreneurs to encash their businesses.

Consumer engagement is a major challenge to most e-commerce brands globally. Converting visitors to customers and generating profit may take longer than anticipated, especially if you lack the domain expertise.

More than 1700 retail stores have closed down in 2020, with the number projected to further increase in the subsequent years. This represents a fundamental shift toward online purchase, which means there will be more pressure ahead for less e-commerce savvy business owner.

Without taking proper action, your online business is going to be another statistic and likely to incur significant losses. If you want to increase your sales, build a bigger brand, and make more profit, the Direct-to-Consumer (DTC) route is an alternative to consider.

Before we tell you how this model works, let's understand what it is and why it maybe suitable for your brand.

What is Direct to Consumer (DTC) Business Model?

Direct to Consumer, DTC, or D2C, is a business marketing strategy that removes any third parties. In short, consumer brands sell their products or services directly to their customers, hence having control over the entire sales cycle.

The DTC model had been on the rise for the past few years, but it became more popular after the onset of the Coronavirus pandemic due to the closure of physical sales shops. Studies from the US business industry suggest that DTC may be the next big thing in the retail sector.

So what's stopping you from embracing it? Reputable companies like Shein and Happy Socks are making big waves and gaining more customers by using this new business model. Your business can grow to the next phase if you are able to implement some of these strategies successfully.

The Benefits of DTC Marketing

Consumers are willing to pay for quality products, reliability and excellent service while shopping online from the comfort of their homes. Through the DTC model, your e-commerce business can continue to scale despite intense competition from online marketplaces. e.g. Amazon, Etsy

1. Full Control of Your Brand

Online Marketplaces like Amazon, Walmart and eBay are attractive platforms for budding online brands. Even though these marketing sites can offer you sales and ease of scale, they come with challenges such as high selling fee, intense competition, constant price pressure, and risk related to Amazon ever changing policies. Growing your brand on Amazon takes time since customers are likely to remember Amazon rather than 3rd party brands. Third party sellers are not allowed to contact customers on Amazon directly except through Buyer-Seller Messaging.

On the other hand, DTC brands have control over their marketing, pricing, delivery and customer engagement.

2. Greater Insight

DTC means that you can interact with your consumers directly, allowing you to understand more about your customers' persona. Once you understand their buying behavior and perception towards your brand, you can better align your brand and products to suit them. This can help to foster brand loyalty and a longer customer lifetime value.

3. Speed

Most Consumer packaged goods (CPG) brands take longer to implement new ideas since they tend to be a bigger set up and require more layers of approval. This is rarely the case with micro brands since the priorities are skewered towards the customers, brand alignment and profitability.

4. Scalability

Before the dawn of internet, brands depend mainly on retailers to acquire customers. Today, thanks to the accessibility of internet and popularity of social media, brands can reach consumers around the world easily. Your business no longer require a physical store. Factors like CMS (content management system), social media marketing and automation software have allowed brands the infrastructure to scale at ease.

DTC Marketing Strategies

DTC marketing strategies will depend on your brand's objective, brand maturity, budget and etc. Whether you are starting out or familiar with DTC marketing before, these tips can help you start over.

1. Brand Identity

Establishing a brand is essential when you decide to embark on a DTC route. Credibility can be forged via social media content, website design, social proof and domain knowledge in the right niche. To enhance credibility, your brand needs to have an identity and actively engage it's audience. This will build consumers' trust and overtime lead to super fans (brand ambassador). A recent study by Forbes reported that 62% of Millennials admitted to becoming loyal customers of a particular brand if it engaged them on social media.

2. Influencer Marketing

Most brands are willing to spend on influencers partnership to establish their brand credibility and boost their sales, since consumers has a tendency to trust recommendations from people they are familiar with.

Another way to grow your brand is by selling your brand to an aggregator. Rainforest is a leading acquirers of E-commerce brands that can scale your brand while allowing you to exit profitably. Other companies that offer similar services are Thrasio, Berlin Brands Group and SellerX. Contact us today for a quick valuation of your business.

3. Email Marketing

As with direct marketing, you need to reach your consumers through multiple touchpoint consistently. Most people assume that direct email marketing is no longer effective, evidence suggests that the reverse is true. Email campaigns generate traffic conversion rates of 4.29%, a rate higher than those from search, direct, and social media platforms.

Therefore, email is still an important tool to explore even at this age of social media. Start providing valuable content to your subscribers regularly, over time you will find improvement in the CTR (click through rate) and sales from this channel.

4. Customer's Experience Matters!

User-generated content (UGC) is an essential  marketing tools for e-commerce business owner. When you create a pleasant experience for any customers, you give them the opportunity to share their positive experience with other potential buyers. This is a form of social proof aka credibility.

Personalization is an awesome way to achieve brand uniqueness and allow you to stand out from other brands, making your product the preferred choice. Brands with the biggest fanbase understand that great customer experience leads to bigger sales and better profit margin.

5. Win Back Lost Customers

The average online shopping cart abandonment rate is 69.8%, which can be a major pain point for business owners. You can set up sequential email to follow up with them. During peak shopping season, e.g. Black Friday or Cyber Monday, you can provide them with discount code to regain the lost sales.

The DTC model is on the rise and likely to stay. Creating a successful DTC brand requires hands on digital marketing skillset, financial resources and persistency. Are you ready to embark on this journey?

Seeking To Build Your Brand?

Do you want your brand to continue thriving without the stress of growing it? Contact Rainforest today to make this happen. Reach out today for a free evaluation.

Written by

Macgyver Ng

Helping entrepreneurs to encash their businesses.

Written by

Macgyver Ng

Helping entrepreneurs to encash their businesses.

More Articles

More Articles

Are you considering selling your brand?

Or maybe you are just interested in getting a valuation and learn about the process?