In recent years, more and more people have jumped on the e-commerce business train and while some may be satisfied with the traditional wholesaler-retailer business model, some want more.
More entrepreneurs are looking to increase their control over their prices and product image and in looking for a way to do this, stumbled upon the direct-to-consumer business model.
This business model’s rise in popularity has been so great, that its sales are expected to reach about $161.22 billion by 2024.
If you would like to start your business using this model or are looking to transition your online store into something new, this article is just for you.
What Makes DTC Brands Unique from Traditional Brands
A Direct-to-consumer e-commerce business runs on a unique online business model whereby they sell their products and services straight to their customers.
They sell through their online stores or platforms instead of going through the traditional means of selling on physical brick and mortar stores or using online markets like Shopify or Amazon.
This model allows sellers like you to have almost complete control of their consumer’s experience from the beginning (product creation & branding) till the very end (customer service, delivery, etc.)
The uniqueness of the Direct To Consumer business model has made it very popular recently thanks to an increasing number of online shoppers.
This increase has created a need for online businesses to differentiate themselves from the crowd of traditional businesses and provide a different experience to their customers and DTC is one way they can do so.
Direct To Consumer vs. Wholesale
The goal of using the DTC model is to sell your goods straight to the consumer without going through any form of a middleman. On the other hand, wholesaling completely depends on the middleman.
In the wholesale business model, manufacturers or wholesalers sell their goods in huge amounts to retailers. Then, the retailer markets and sells the products to the consumer, serving as the middleman between the manufacturer and the consumer.
So, for a traditional wholesale business model, the pipeline goes as thus:
Manufacturer – > Wholesaler – > Retailer – > Consumer
For the direct-to-consumer model, it goes as thus:
Manufacturer – > Personal online store – > Consumer
From these two pipelines, we can see that in the DTC model, the wholesaler and the retailer are both cut out. This removes the additional costs of commissions that a manufacturer might need to pay these middlemen.
It also gives the manufacturer the ability to control the pricing of their products since there will be no need for middlemen to include their profit margins every time it is resold.
Key to DTC Brands Success
Building a successful direct-to-consumer business involves a lot of hard work. You will need to be diligent and strategic in your planning, finances, leadership, team building and marketing.
One thing is sure though, if you put in enough time, hard work, perseverance, and resources into the business, you can get high returns on your investments.
Here are some essential components that are necessary for any DTC business that aims to become successful.
1. Top-notch customer support: Bad customer service such as offering slow responses can tarnish your brand’s image.
In the highly competitive e-commerce landscape, exceptional customer service is crucial for building trust, fostering loyalty, and gaining a competitive edge.
Make it a priority to provide timely and quick responses to customer inquiries and concerns. Utilise various channels to communicate with your customers such as email, live chat, or social media; it will make it easier for customers to reach out.
Also, seek feedback regularly from your customers so you can gauge how satisfied they are and even identify areas for improvement. They can do this by either providing honest reviews or through surveys.
2.Customer data: One major benefit of the direct-to-consumer model is that you have a lot of information on your customers.
Since you will be handling the marketing and sales for your products personally, you have access to all of the customer information that would normally only be available to the retailer.
Using this customer data to your advantage is vital in building a successful DTC business.
You can use their reviews and comments to improve or revamp your products, removing or adding based on their complaints or likes thereby personalising your products to the taste of your customers.
3.Clear and effective communication: Your website, social media channels and marketing campaigns all work together towards building your brand image so the message they are providing has to be clear and uniform.
When your customers see your campaigns or interact with your socials, the information they see needs to be consistent. So, if you are promoting offers as part of your marketing, ensure your website is updated with regards to this.
4.Fast delivery: Due to recent trends, customer expectations regarding delivery speeds have skyrocketed. Customers have stated that they prefer businesses that provide same day deliveries over those that don’t.
They also expect a seamless delivery process and notifications that inform them of the progress of their delivery.
To be successful you will need to provide all these to your consumers.
Globallyfulfill is a great way to do this. The company provides product storage and fulfilment services for clothing and apparel. Using their state-of-the-art storage facilities and top notch delivery contacts, they can keep your products fresh till it gets to your customer’s doorstep.
7 Steps to Build a Successful DTC Brand
1.Build and Sell a Product Of Value
To start any form of business, you will need to first have a product or service to sell. As a business using the direct to consumer model you have the opportunity to sell a product of your own making.
If you have an idea you want to bring to life, you can begin by designing or creating prototypes till you get a version you like . Once you have a working prototype, the next step is manufacturing.
Chances are you may not have the resources required to begin mass manufacturing your prototype for sale. So you will need to employ the services of a manufacturer. For this, a private label manufacturer will be your best option.
This will involve you making a contract or deal of some kind with a manufacturing company or supplier to help you build, design and customize a unique product for your store that will be sold only to you.
All you will have to do is pay for production and sometimes, source for the raw materials yourself (depending on the manufacturer you choose).
2.Setup Your Website
It is now time to start building your website.
Select a domain name that is easy to remember, reflects your brand, and is relevant to your products or services.
Next, you choose a reputable web hosting provider like Hostinger to ensure your website is accessible and runs smoothly. Consider factors such as speed, security, and customer support when making your decision.
Ensure your website has a clean and intuitive website design that guides visitors seamlessly through your products or service with easy navigations such as clear menus and accessible links.
3.Build Up Your Marketing Plan
Once you have your products it’s time to start pushing them out and marketing them.
Here’s a simple marketing plan you can build upon:
Do market research and understand your target audience
Gather information about your industry, competitors, and current market trends.
Use this to identify any opportunities or challenges you may face once you are in the market.
Also, use surveys and analytics tools to collect data about your audience. Things like their age, gender, occupation and income level can be used for customer segmentation and personalized and target marketing.
Create and optimize your online presence
First, your website needs to be user-friendly, ensuring that people can easily navigate and understand its content regardless of the device they’re using.
Social media platforms, such as Facebook, Instagram, Twitter, and LinkedIn, are a great place to reach out to a vast audience and promote your brand. By consistently and strategically posting, you create brand awareness and build a community.
Use email marketing to provide your customers with useful and engaging newsletters, share promos, and inform them about new products.
4. Keep a Clean and Trustworthy Brand
Whether you are just starting or you have an already established online brand, one thing you need to keep in mind about building a DTC business is that your brand and reputation are key.
Your products are most likely going to be new to the market and won’t be sold at any retail stores so the first contact your customers will have with your product will be on your website.
This is why you need a strong and trustworthy brand. Customers are less likely to purchase a product they have not physically examined but, if you have a reputable brand identity i.e. your customers know that every product you sell performs excellently, they are more likely to buy from you.
Here are some ways you can build your brand’s reputation:
Prioritize customer service
Provide instant responses to your customer’s enquiries through live chats integrated into your websites. This may require that you hire a customer support manager.
Ensure their experience with your online store is smooth:
Your website should be well-designed and user-friendly. It should possess product search features that make it easy for customers to find products. Also make the checkout and payment process as straightforward as possible.
5. Create High-Quality Product Detail Pages (PDPs)
You have to put extra effort into creating clear yet concise copy for your products and invest in taking good quality photos and videos.
When writing your product descriptions, ensure you focus on key features or benefits of the product. Make sure your description is as accurate as possible and do not lie or exaggerate.
Also use clear, well-lit product photos and well-recorded videos taken from multiple angles to show the customer how it looks.
You can also create videos and pictures of your product in action in a real life scenario. This way your consumers have an understanding of what the product is intended for.
You can also take pictures of the product next to other common items to provide them a sense of its size.
6. Ensure All Your Channels Are Brand Aligned
The image of your brand is backed up by the products you sell, the experience you provide to your customers and the content you post.
So, if you have multiple channels of communication, maybe social media, email newsletters and your website, you need to make sure the content present on all these channels is aligned with your brand’s identity.
For example, if your social media content is promoting a particular product and you place an offer on said product, ensure your website has been updated to show this offer on that product.
By doing this, your customers will have a seamless and consistent experience whenever they interact with your store or channels.
7. Get Your Finances in Check
Last but not least, ensure all your finances and business expenses that concerns starting up the business have been planned out.
You will need to know how much will be needed to manufacture your products, build your website, hire workers, store your products, market your products and handle shipping and delivery.
Although managing a DTC business does not cost as much as a traditional business, at its start, it can take quite a lot of money.
Also, you have to be prepared for the risks involved in starting any business.
Starting a DTC business or transitioning into one can be a great business decision thanks to its popularity and overall potential. But there are some things you need to know on how to start one.
This article has highlighted the key and important aspects you should understand when getting a DTC brand up and running. Using this information, you can without a doubt build a successful direct-to-consumer brand.