The wonders of the digital era only amplify as the D2C revolution takes over the e-commerce wave that has almost ruled the past decade. It continues to stun businesses and consumers with an array of possibilities that makes ‘not engaging’ an impossible phenomenon - for a consumer as well as for a business. D2C or Direct-to-Consumer has picked up pace in the new normal and how. As we speak, India is already brewing 800+ D2C startups across the country. While the success and scalability of the D2C route might vary for brands depending upon their category, D2C e-commerce still holds its ground strong enough for any business that wants to strengthen and control its sales and customer relationships.

Planning to take the D2C route? There are primarily two channels that enable your D2C business.

- An Online Marketplace - An e-commerce website where a number of third-party sellers are selling their products and joining the party. For e.g. Amazon and Flipkart.

- E-commerce Website - An e-commerce website that is owned and built by you, from where you sell your products. Here, you‘ll also extend your D2C efforts to manage your operations, marketing, and sales.

Both have their own pros and limitations. Let’s look at some key elements when it comes to building a D2C channel through an online marketplace.

Entry Barriers

There’s a criterion that brands need to adhere to before they are accepted by an online marketplace to sell on their platform. You need to go through none of it if you’ve built your own e-commerce site. You need to be a legally registered business entity, your products must be fairly and competitively priced, and demonstrated expertise in your domain/category are a few of the many regulations. What brands get is an entry into a website that’s built for selling and already attracts your prospective buyers in big numbers.

Audiences - As most online marketplaces offer products at reduced rates, offer a variety of products from a variety of brands, and offer fast shipping, they see a huge wave of the audience on a consistent basis. If we are to take Amazon’s example, it looks at 5.7 billion visits on average per month.

Selling Tools - While as a D2C brand - a category that’s fairly new and only gets challenging with the already glossy landscape of marketplace behemoths - it’ll be a while before you understand what kinds of selling tools work and which one’s don’t, an online marketplace comes with a complete toolkit to help you start your sail and accelerate your sales. It can offer you analytics on the performance of your products, customer behavior, sales, ads that push your products to relevant visitors, and most importantly, a shipping facility that’s already up and running to deliver your products to your customers in a time-bound manner. With a variety of third-party tools available for D2C brands to build their own e-commerce set-up, D2C brands would still take time for conversions to happen as compared to an online marketplace.

Cost of Selling - Online Marketplaces charge a fee when you make a sale through their platform, known as referral fees or commission - a monthly fee or a percentage of the sales - varies according to your category. This increases your ‘cost of acquisition’ which increases with an increase in sales. What benefits a D2C brand is a steady flow of shoppers which is time-consuming and also demands some level of investment before seeing any impressive numbers.

Retention - Customer retention can be flaky in a marketplace as you are in between many other brands. Not only that, the customer is looking to buy at the best price and the marketplace is looking to make a sale, be it yours or your competitor’s. That’s it. There’s no space to build a deeper brand connection and it’s mostly and strictly very transactional. Moreover, marketplace rules limit brands from sharing any external website links. What benefits a D2C brand is gaster conversion rates as compared to your own e-commerce website which, if you are a new brand, is always stickier than in a marketplace.

Sustainability - Everything is quick in an online marketplace, but not as quick when you are building an e-commerce site from scratch. It’s always a strategic call that brands must take depending on what is the end objective of the D2C strategy. In an online marketplace, it’s easy to launch a product, it’s easy to get visibility and even sales. However, your control over the CX is very limited and you consistently have to adhere to the marketplace rules to stay in the game.

Social Commerce Platforms - Marketplaces are not just limited to e-commerce giants like Amazon and Flipkart. Social Media giants like Facebook and Instagram are also potential channels for D2C brands to launch, scale, and grow. Here’s where most of your audience is spending most of their time (not necessarily to shop, but to discover, to engage, to see what their peers have to say about you) which makes it the perfect place not only to introduce your brand but also to grow organically. D2C brands must treat these social networks as marketplaces too as here’s where people directly engage with brands through organic content.

Key Social Commerce Points to Remember:

Most consumers ignore sales messages. They don’t work anymore for two reasons. One, there are just so many in numbers that it’s practically impossible for a user on social media to evaluate who to trust. Two, it just doesn’t cut through the audience that’s constantly exposed to so many alternatives, each of which has a uniquely appealing value proposition that is teasing your prospect with relevant content. The consumer of 2022 is tech and content savvy does her research and will compare your brand’s claims to past customer’s reviews/testimonials - across channels, before investing her money in your product. Millennials and Gen Z as they are popularly known, respond to content when it rewards their time and adds value beyond a static buying transaction and problem-solving.  

D2C is only picking pace, it’s not a new wonder that businesses aren’t aware of. When evaluating an online marketplace with an eCommerce site built from ground zero, consider only the end objective of your D2C strategy. As I mentioned at the start, there are no cons of any channel, just the relevance to objectives differ.