Once upon a time, in the not-so-distant past, brands looking to sell directly to consumers (D2C) focused their efforts on building their online empires through their branded websites. It made sense—after all, having full control over the customer experience and brand messaging seemed like the ideal approach. But times have changed, and the landscape of D2C selling has evolved. According to Omnia Retail, D2C sales have surged by more than 36% overall from 2020 to 2022 in the US and are projected to reach $182.6 billion in 2023, including sales from both established businesses and digital natives.
Today, relying solely on a branded website to sell D2C can come with risks. Enter the concept of concentration risk: putting all your eggs in one basket. By solely relying on a single Web Store, brands can limit their revenue streams and brand reach, leaving them vulnerable to market changes and disruptions.
To truly thrive in D2C, established brands must embrace a new approach: going beyond their Web Store. That means branching out to other channels and marketplaces to diversify their sales channels, expand their customer base, and ultimately, drive more revenue. In this blog post, we will delve into how to build a direct-to-consumer business and why branching out from the web store is the No. 1 tip for successful D2C selling.
Why Do Marketplaces Matter?
Marketplaces are the bustling bazaars of the modern digital world, where brands from all corners of the globe gather to showcase their wares. These online marketplaces, such as Amazon, eBay, Walmart Marketplace, Target Plus, New Egg, and many others, are a passing trend and a vital avenue for brands to tap into the vast potential of D2C selling.
One of the most significant benefits of selling on marketplaces is the established audience they bring. With millions of active users and customers who trust the platform, marketplaces offer brands instant access to a massive customer base. These platforms have already built a loyal following of shoppers who regularly visit to explore new products and make purchases.
By leveraging the reach of these marketplaces, brands can immediately tap into a vast pool of potential customers without having to build their customer base from scratch.
For example, let's look at Amazon, the undisputed king of marketplaces. With over 300 million active customer accounts and a global reach, selling on Amazon offers brands unparalleled opportunities to connect with customers across different countries and regions. By listing their products on Amazon, brands can benefit from the platform's extensive customer base, which includes diverse demographics, interests, and buying behaviors. That allows brands to expand their reach and target new markets and demographics they may not have been able to reach otherwise.
In addition to the established audience, marketplaces offer brands access to invaluable customer data and insights. These platforms provide rich analytics and reporting tools that allow brands to understand customer behavior, preferences, and trends. This data can be leveraged to refine marketing strategies, optimize product offerings, and enhance the customer experience. Brands can use these insights to tailor their products and marketing efforts to better resonate with their target audience, resulting in increased sales and customer loyalty.
Furthermore, marketplaces also provide a sense of trust and credibility to brands. Many customers feel more comfortable purchasing from established marketplaces due to their reputation and robust customer protection policies. By selling on these trusted platforms, brands can leverage the credibility of the marketplace to establish trust with customers, especially if they are new or lesser-known brands. That can be a significant advantage in building brand awareness and gaining customer trust, leading to long-term customer loyalty and repeat business.
Marketplaces are not just another sales channel but a crucial pillar for building a direct-to-consumer business. They offer established audiences, access to new markets and demographics, valuable customer data, and increased trust and credibility. Brands that embrace the power of marketplaces and strategically leverage their reach and resources can unlock tremendous growth opportunities and take their D2C sales to new heights.
What Keeps Brands from Selling on Marketplaces?
While marketplaces offer many benefits, some brands may hesitate to jump on the bandwagon. Let's explore some common reasons why brands may be reluctant to sell on marketplaces and debunk some misconceptions holding them back.
One primary concern for brands is the fear of losing control of their brand reputation. Brands often spend significant time and effort building their brand image and maintaining a consistent customer experience. They may worry that by selling on marketplaces, they will have limited control over how their products are presented, priced, or fulfilled and that it may impact their brand's reputation negatively.
For example, a luxury fashion brand may need to be more responsive about selling on a marketplace like eBay or Amazon, fearing that their high-end products may be listed alongside cheaper alternatives, diluting their brand's exclusivity. However, it's important to note that most marketplaces have strict guidelines and policies to protect brand integrity. Brands can set up their own branded storefront within the marketplace, customize product descriptions, and use their product imagery to maintain their unique brand identity.
Another concern is that brands may fear losing customers to other sellers in the same marketplace. With multiple sellers competing for the same customer base, brands may worry about losing control of the customer relationship and potentially losing loyal customers to other sellers offering similar products at different prices.
However, utilizing tactics like providing distinctive product bundles, offering top-notch customer service, and fostering brand loyalty through customized marketing initiatives can help to alleviate this fear. Brands can also use the customer data and insights the marketplace provides to understand their customers better and tailor their offerings to meet their needs, thereby building a loyal customer base that chooses their products over others.
Additionally, brands may have concerns about competition, pricing, and fulfillment on marketplaces. They may worry about competing with other sellers on price, potentially leading to lower profit margins. Brands may also be apprehensive about the fulfillment process and how it could impact their customer experience.
However, it's important to note that marketplaces often provide fulfillment options, such as Fulfilled by Amazon (FBA) or eBay Global Shipping Program, which can streamline the fulfillment process and ensure a positive customer experience. Moreover, brands can differentiate themselves by offering unique value propositions, such as superior product quality, excellent customer service, or exclusive promotions, rather than solely competing on price.
How Going Beyond the Web Store Can Benefit Brands
In the fast-paced world of e-commerce, brands need to think beyond their Web Store to stay ahead of the competition and unlock new growth opportunities. D2C sales offer numerous benefits to brands, and it's all about being strategic and diversifying sales channels to maximize their potential.
One significant advantage of diversifying sales channels is that it mitigates concentration risk. Relying solely on one Web Store can be risky. Any sudden changes in search algorithms, marketplace policies, or customer preferences can significantly impact a brand's revenue and profitability. By expanding to other sales channels, brands can diversify their revenue streams, reducing the risk of overdependence on a single channel. That can provide a safety net and protect the brand from potential revenue loss due to unexpected changes in the e-commerce landscape.
Another key benefit of going beyond the Web Store is being where the customers are. Marketplaces are known for their massive customer bases, providing access to millions of potential customers actively searching for products to buy. Selling on marketplaces can allow brands to tap into these established audiences and reach new markets and demographics they may not have otherwise been able to target through their Web Store alone. That allows brands to expand their customer base, increase brand exposure, and drive more sales.
In addition, selling on marketplaces can complement a brand's existing e-commerce strategy, driving more sales and growth. Marketplaces can serve as a strategic extension of a brand's Web Store, allowing brands to leverage the marketplace's traffic and visibility to drive traffic to their Web Store, increase brand awareness, and build customer loyalty. Marketplaces can also provide valuable insights into customer preferences, market trends, and competitor analysis, which can inform a brand's overall e-commerce strategy and help them make data-driven decisions to optimize their sales and marketing efforts.
For example, a fashion brand that sells exclusively on its website can expand its sales channels by selling on a fashion-focused marketplace like ASOS or Zalando. That provides access to a larger customer base of fashion-savvy shoppers who frequent these marketplaces, increasing the brand's exposure and potential for sales.
How to Successfully Sell Direct to Consumer through Marketplaces
When selling directly to consumers through marketplaces, brands can employ several key strategies to increase their chances of success. Here are some tips to help brands thrive in the competitive marketplace landscape.
Optimize product listings: The first impression matters; in online marketplaces, product listings play a crucial role. Brands should invest time and effort in creating compelling and accurate product descriptions, high-quality images, and relevant keywords to optimize their listings.
Leverage data and analytics: Data is a powerful tool, providing valuable insights into customer behavior, preferences, and market trends. Brands should use the analytics tools provided by marketplaces to understand their performance better, track sales, monitor customer reviews, and analyze product performance.
Utilize fulfillment services: fulfillment can be a complex and time-consuming process, but marketplaces often offer fulfillment services that can streamline the process for brands. By leveraging these services, brands can benefit from the logistics and fulfillment infrastructure of the marketplace.
Build brand reputation: maintaining a strong brand reputation is crucial in the competitive landscape of marketplaces. Brands should actively manage their reputation by monitoring customer reviews. Positive reviews and ratings can build trust and credibility with potential customers, increasing sales and brand loyalty.
Differentiate with branding and a unique value proposition: In a crowded marketplace, brands must differentiate themselves from competitors. Building a strong brand identity, including a unique value proposition, can help brands stand out and attract customers.
Collaborate with marketplace promotions and advertising: Brands should explore and take advantage of these opportunities, such as sponsored product ads or marketplace-specific promotions, to increase product visibility, drive traffic to their listings, and generate more sales.
Schedule time with a Zentail expert to see how we can transform your Ecommerce business.