You walk into a store and see a beautiful vase on one of the main shelves. It costs €27.

It truly is a beautiful vase:

  • It is handcrafted.
  • Its design is spectacular.
  • It comes along with a matching plate.

The thing is you have hundreds of those in your own store and sell them at €9 each. And —if a significant order is placed— you lower the price.

So when we talk about B2C, we are really talking about a company that sells to distributors who then sell to retailers who then sell to the end customer. The more middlemen, the more expensive the price.

That is why many companies are implementing the D2C e-commerce model; in other words: directly selling to the end customer themselves.

Would you like to know what it is about and what its advantages are?

Learn about it all in this post.

Here we go! 😉

👉 What is D2C e-commerce (and how is it different from other types of sales)?

D2C stands for Direct to Consumer, but what does that really mean?

D2C means selling without any middlemen so that the product reaches the end customer directly from the brand.

Surely, you have heard of B2B e-commerce and B2C e-commerce. In the former, sales are made Business-to-Business while in the latter, sales are made Business-to-Consumer

On the other hand, the difference between D2C and B2C is not always very clear.

Even if in both cases the consumers are the same, the way of reaching them is different. The B2C model follows certain steps to reach customers, which usually include:

  • The producer sells to the wholesaler.
  • The wholesaler sells to the distributor.
  • The distributor sells to the retailer.
  • The consumer buys from the retailer.

Conversely, in the D2C model there are no middlemen; the producer sells directly to the end consumer.

Here’s an example; imagine you commercialize your own organic honey.

If you followed the B2C model, you would be selling that honey to distributors who would then sell it to stores or supermarkets. Also, you could be selling it via Amazon —something very common these days.

However, by implementing a D2C model, you would remove this chain and sell the honey directly to the end consumer from your own store.

✅ Examples of D2C Businesses

These are some examples of real D2C businesses who manufacture their products and then sell them to the public from their website.

First, there’s Bark: a brand that specializes in dog products, from toys to dental sticks to freshen your dog’s breath, to foods or treats. It also includes a monthly subscription service in which the client gets to pick a themed-product box to be sent monthly to their home address.

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Another example is  Kylie Cosmetics, a cosmetics e-commerce.

This business sells its Kylie Jenner brand directly on their online store. No middlemen. This means both advantages and challenges we will consider next.

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👉 The advantages of D2C e-commerce (and how it allows you to better control your business)

In case you still don’t know how you can benefit from the D2C model, here’s a list of its main advantages.

✅ 1. Higher profit

This is the most obvious benefit.

If you cut out the distributors and middlemen, the profitability you get for every sold product is now higher.

Let’s go back to the example of the e-commerce selling jars of organic honey.

Even if the honey is sold at €6/jar in stores, the manufacturer has possibly obtained €2 for every jar sold to distributors. However, if they had sold it directly on their online store (at €6 each), they would have obtained the whole profit (we’re clearly simplifying things here because they would still need to pay taxes, but you get the idea).

Selling on other e-commerce platforms is practically the same; there are additional costs that add up and reduce the profit margin on every closed sale.

✅ 2. Control over Customer Experience

Brand image refers to the feelings and emotions we transmit to our audience.

So what can you transmit when your product is one more among many similar ones?

When you sell via middlemen, you do not own a brand as such; you hand it over to third parties. And that means you cannot offer your client any kind of interaction with the values of your brand. 

For example, let’s suppose that Columbia —a brand known for selling sportswear and outerwear— wasn’t as popular. How could they justify their shoes being more expensive than those of other brands when selling on Amazon?

If you go to their website, you can see they can communicate this in a better way: adventure, quality, innovation, high performance.

Customer experience changes completely when visiting their website. Customers move away from merely seeing a standard pair of shoes to visualizing themselves with those shoes on their next 5-day trek.

See the difference?

If you’re interested, this post contains some ideas for enhancing your brand.

➡️ So have you thought about your brand’s reputation?

The same thing happens with reputation.

If another company sells your products, they can make mistakes that are beyond your control and that can result in dissatisfied customers. And since you’re not even responsible for customer interaction or order management, it is not up to you solving that to avoid a bad impression.

That’s another advantage of the D2C model: you handle the entire sale process, control how customers see you, and even manage complaints from dissatisfied customers.

Interesting, right?

✅ 3. No competing brands “at home”

If you own your own store, you make sure your products won’t be sold in the same place as your competing brands.

For instance, if you sell jackets on Amazon, you will have to compete with hundreds of products in the same category. Your brand will have to outdo the others in order to stand out. In order to do that, it will need a very competitive price, good reviews or some trait that makes it special.

However, in your own store, you can:

  • Provide customized service.
  • Showcase your products’ benefits.
  • Control customer’s attention.
  • Offer special discounts.

You are definitely increasing value and justifying the acquisition of your products while avoiding price competition.

✅ 4. Access to customer data = Connecting with them directly

When you sell via middlemen, you lose access to the data of the people who are buying your products. These data are actually very valuable.

Why is it so important to have customers’ info?

➡️ A. You know your customer better

If we sell directly to the consumer, we can get to know them better because we’ll keep data such as:

  • Consumption patterns.
  • Demographic profile (sex, age, home address…).
  • Personal tastes.
  • Etc.

This will help us get to know our customers better. In other words, to define a profile; why they are interested in our products and how they use them.

By analyzing such data, we will be able to achieve the following:

➡️ B. Improving your products

By getting to know your customer better:

  • Their interests.
  • What they have liked about your products.
  • What they haven’t liked as much.
  • Whether they are attracted to our products or not.

You get some info that will allow you to:

  • Launch new products that will answer to your audience’s demands.
  • Improve cross-selling by knowing what the customer needs.
  • Maximize upselling.
  • Etc.

Also, by tracking the entire process, we will be able to collect interesting data such as to why a customer returns a product. This information not only will help you rectify but offer higher quality products and improve customer experience in general.

➡️ C. Gain customer loyalty

Wait. There’s more.

If you have your customers’ contact details, you can create a closer relation and communicate with them in order to gain their loyalty; that is, to ensure they buy from you in the future.

Don’t forget; it is always easier to sell to someone who has already bought from you than to someone who doesn’t know you at all.

👉 Challenges to keep in mind if you apply the D2C strategy

It is clear that in a D2C business you are in absolute control. This is an advantage but also an inconvenience (or a challenge; it depends on how you want to see it).

To quote that famous line from Spiderman: “with great power comes great responsibility”.

So let’s see some of those “responsibilities”. 😉

✅ 1. Owning your own online platform

To start selling on the Internet, you first need to have your own online store up and running.

This means making an initial investment that you’ll need to keep in mind:

Don’t forget once you have set up your store, it will also need regular maintenance (updates, making sure everything works, creating backups).

✅ 2. You need to invest in marketing to get customers

Customers are not going to simply come rushing in.

Beyond the technicalities, you will also need to invest time and money in getting customers. That means a great effort in terms of marketing.

What options do you have to get customers?

Here, you must combine short-term and long-term strategies.

Short-term solutions mean immediate visitors, but they also require greater financial investment. You can start with:

Medium and long-term solutions include creating a community on social networks and creating positioning content on Google that attracts organic traffic to your store.

👉 So, are you ready to step up to D2C?

As usual, this model has both pros and cons.

But if you finally choose D2C e-commerce, you must be willing to invest time and money if you want your store to get off the ground. However, once you make it, you’ll be closer to your customers and to enhancing your business.

Does that sound good?

Go on then! 😉