As a business owner, you must constantly look for ways to stay relevant in the market.
That's why more businesses are jumping to the direct-to-consumer business model. Because the idea of selling to consumers has a lot of benefits, which you'll learn later.
And over the past few years... there have been a lot of direct-to-consumer brands popping up left and right, especially in the eCommerce space.
But if you're not yet familiar... you're probably asking yourself, "what is a direct-to-consumer business model?"
As the name suggests, it's when a brand sells products directly to consumers or the target market. They're not like traditional retailers, where there are middlemen before selling to consumers.
So instead of having other parties, like logistics, suppliers, and retail stores... the manufacturer or the brand is selling to the consumer directly.
Since you already have an idea of what a DTC model is... it's also essential to understand why many eCommerce businesses are switching or expanding to it. And this blog, you'll know...
What are the common reasons why more eCommerce brands are using the direct-to-consumer model?
And this blog can help you decide whether or not the direct-to-consumer business model is made for you.
Let's jump right in!
8 Advantages of the direct-to-consumer business model
Having a direct-to-consumer brand means you can...
1. Take control of your business
This means you can control all the aspects of your business, even the pricing strategy. It's also up to you what process you'd like for your team to have. Or the system you'll be implementing.
That's one of the reasons why many eCommerce businesses are hopping on the direct-to-consumer business model.
There are no implemented systems or standard operations to follow from other parties. You are in charge of everything... from logistics, packing, shipping, and marketing.
On the other hand... Prominent and popular CPG or consumer packaged goods companies take charge of marketing their products.
That's their job... they want to make sure that when customers are shopping at, say, a grocery store, they will pick up their products.
But marketing is not the job of the retailers or other non-DTC businesses they supply. Speaking of which...
2. Take charge of marketing and positioning your products
As I mentioned, CPG brands are in charge of their marketing but not once the products are distributed. It means retailers don't need to worry about TV ads and other promotional activities.
That's the difference... because if you want to be a direct-to-consumer brand, you need to market your products.
There are both pros and cons when it comes to this. You might need to separate a marketing budget to make your brand known and increase eCommerce sales.
But the good news? You control the marketing aspect and stand out in the DTC space.
You can decide which digital marketing strategies to implement. And you can also strategize your brand positioning.
It's up to you which social media platforms to use, how to execute influencer marketing, and what to do to gain more customer acquisition.
That's one of the reasons why other DTC brands have booming eCommerce businesses. They are creative in their own ways.
Having a DTC business will also help you...
3. Build relationships with your customers
Building relationships with your customers is essential in building a successful DTC brand. They are the backbone of your business.
This is one of the advantages because you can connect with your customers. Unlike traditional business models, you can form a relationship with your customers.
You can talk to them, accommodate them, and nurture your relationship even after purchase. This will also help you turn them into loyal customers.
These are the people who will support your business continuously. So, if you want to build genuine customer relationships... being a direct-to-consumer brand might be for you.
This will also allow you to...
4. Analyze customer data
And because you're running the whole business, you can access customer data and use it for your future strategies.
This allows you to determine what you can do for your customers. Or what are the things you need to improve in your eCommerce store?
For example, you can check the profile of your customers who buy from you the most. Then you can analyze them to see what their similarities are and what they purchase from you.
Having access to your customer data will also help you...
5. Improve the customer experience
Customers need to have a great experience on your eCommerce website when online shopping. They also want everything to go smoothly, from placing online orders to receiving the products.
And DTC businesses have this freedom. You can improve the customer experience by creating your own operation or process.
For example, you can choose the courier company to deliver your products. If customers aren't satisfied, you can change it anytime.
It's your call. That's one of the advantages of DTC brands. Next is...
6. Enhance your business with DTC eCommerce trends
Just like in other areas of marketing, your DTC strategy needs to evolve. And you can enhance your business by learning the DTC trends.
Again, you have complete control. If you see that more DTC brands are into social selling, you can try that. If they're into content marketing and seeing results, you can also implement that.
That's the beauty of the direct-to-consumer business model. You can enhance your business on your terms. Nothing can stop you.
Another reason why more brands are switching to the direct-to-consumer model is...
7. Lessen the operation costs and increase profit
Since you're in charge of every aspect of your business and selling directly to your consumers... you don't need to pay extra for other services.
You don't need to pay for third-party logistics, suppliers, retailers, packing, shipping services, etc.
For example, you have product distributors. Once they get your products, you can only get a percentage from the total sales. Or, they're paying you upfront, but they can gain more profit.
Why? Because they're going to sell your products at a higher price. Not to include all the costs before your products reach the distributors.
You can sell your products directly to your customers, take care of everything, and have more profit. But you don't need all these if you're a DTC brand. You can have little operation costs.
Another advantage of having a DTC business is...
8. Increase customer satisfaction
Because you have access to customer data and personalize the customer experience... this can increase customer satisfaction.
And that plays a significant role in increasing your online sales. If more people are showing their satisfaction with your brand, you can attract more customers.
That's an advantage because you can implement strategies that will strengthen your social proof by having greater control over your business.
So, these advantages mean...
The direct-to-consumer business model is here to stay!
For sure... like you, other online retailers are always on the look to grow their business. And through the direct-to-consumer model, you can be one step ahead.
This doesn't mean you need to change your business model entirely. It's best to conduct market research and test your products yet.
This will ensure that you can prep your direct-to-consumer brand for success. So, if you want to learn how to smash your direct-to-consumer brand...