Direct to Consumer (DTC) is comparatively new model adopted by many businesses over a period of time and is a great way to enhance your business. There are many benefits you will get when you are using DTC channels. This guide will cover all the things you should know about DTC and why you should be using it.
What is DTC?
Direct to Consumer is when manufacturer or any individual with a product sells directly to consumers, where there is no third-party channels like brick-and-mortar retailers, wholesalers, or online marketplaces like Amazon are involved. Here, the end product is directly sold to the customers. We can say that there is no middle man involved. That’s what direct to consumer is. Most of the DTC brands not only retain more of the revenue from sales, but also markets directly to customers and builds a lasting relationship. Building a DTC brand is never quick or easy. Let us see what are Pron and Cons of same.
Benefits of DTC
There are many benefits of DTC. Here are some of them.
- You will save a huge amount of cost here. As you don’t have to pay any middlemen here.
- With very small budget you can start your business. For eg buy a domain, purchase a subscription to any eCommerce platform like MoreCustomersApp, Shopify, ecwid to handle your website and manage orders, get an automation tool for SMS and email marketing, open Social media accounts and share your business products to social audiences, all these and more all under $100.
- You are in direct contact with your customers. This will help you with marketing.
- Better brand loyalty.
- You can expand with ease as you have the data of the customers.
- You can know what your customers feel about the product.
Disadvantage of DTC
There are few disadvantages too. Here are a few of them.
- It takes time to grow your customer base as you are selling them directly.
- Acquiring visitors on your website and getting first customer is difficult as you don’t have abundant flow of traffic like Amazon or flipkart.
- Difficult to expand the market as know one knows your brand.
- More hard work is needed here, as you are the sole person to handle Orders, Add products, Manage website, etc.
Store Vs DTC
Now, let’s take a quick comparison of store vs DTC. DTC is where you are selling things directly to the customer. Similarly, a store or a marketplace is also selling things directly to the customers but there is a small difference. If you are running the store all by yourself, it’s kind of similar to DTC. However, if you are outsourcing it, you are paying a huge fee there.
Also, you will have other staff members in the store. This will cost you some money. If you are selling wholesale, you will have a middleman who does all the transactions for you.
So, one can also consider the store if they don’t want to fully focus on direct selling.
Third-Party and DTC
We will now see a quick comparison between third parties and DTC. In a third party, you will have a staff member who will sell the products to the customer. It can also be a marketplace. Here, you will have to pay a small commission to them or they might be taking products from you at a fixed rate and selling it at a higher rate.
Either way, you don’t have any contact with the customer, you are dependent on the third-party service, and you never know what your customer thinks of your product. Third-party can also be applied for an online business. This is where you are not selling directly but through a third-party website.
If you don’t want to do the hard work, you can find third parties and outsource it to them. This will lower your margins but you can expand it with ease.
DTC brand examples who started with MoreCustomersApp
Alka pharmacy manufactures ayurvedic products and specialize into herbal powder. They have started selling Direct to Consumer through their website with MoreCustomersApp and scaled up their business.
Indoorswing.co is the Leading Firm in Manufacturing & Exporting Swings from India.The Company makes Indoor Swings, Out door Swings, Porch Swing, Patio Swing, Wooden Swings, Metal Swings , Garden Swings ,Hanging swing & Playground Equipments & Other Accessories used in Swings. They too have started selling through their website.
Conclusion
To summarize, these are the ways you can do offline or online business. The best way to start your DTC business is by creating your website instead of selling your products in a marketplace. Here, the customer will directly come to your website and buy the product they need.
