Selling your products directly to consumers can give your brand some big advantages. Since you’re in charge of the entire shopping experience, you can collect valuable customer data and create accounts. And since there’s no “middleman” sharing profits with you, you can potentially see higher margins on every sale.
But there’s a lot that goes into selling direct-to-consumers (D2C), and whether you’re all-in or you’re still thinking about adopting this popular sales model, it’s important that you consider what it takes to pull it off.
Here are six tips you can’t ignore if you’re selling D2C.
1. Understand your customer’s preferred shopping experience
In order to be successful at D2C, you need to be familiar with broad trends and data about consumer behavior, as well as how your customers specifically behave. If you’re going to facilitate the shopping experience, you’d better have a solid grasp of what your customers want in a shopping experience, as well as how any changes could interfere with that experience.
For example, a high percentage of consumers use buy-online, pick-up-in-store (BOPIS) or click-and-collect. (In 2018, this accounted for nearly half of all purchases on HomeDepot.com!) The vast majority of manufacturers simply can’t deliver this kind of experience. If you sell nationwide and don’t have thousands of brick-and-mortar stores, your customers can only take advantage of BOPIS through a retailer.
And there are plenty of other perks your customers are likely used to: free two-day shipping, rewards points, free 90-day returns, etc. That’s why D2C often works better in addition to selling through retailers, because it allows consumers to buy your products through their preferred retailers, rather than forcing them to compare your product to a competitor plus retailer perks. Brands that go D2C-only often wind up stacking up benefits in their competition’s favor—even though the retailers are the ones providing the additional benefits.
If you want to thrive in D2C, you need to identify the aspects of the shopping experience that matter most to your customers and deliver on them.
2. Give consumers a compelling reason to buy from you
Similarly, it’s important to think about what you can uniquely offer your customers. Why should they go through the trouble of creating a new account, potentially waiting longer to have your product, and missing out on other perks when they could just buy from a retailer they use all the time?
Depending on your products, you may be able to offer a wider selection of configurations, such as unique colors, sizes, designs, flavors, or scents. Or perhaps retailers don’t carry the full range of your product catalog, and so you can offer complementary products or bundles consumers won’t find elsewhere.
Keep in mind: if you aren’t selling D2C-only, then any unique value proposition you develop may create tension with your retail partners. They may pressure you to give them the same selling options.
3. Explore ways to offer competitive pricing
Price is one of the biggest factors consumers use to decide where to buy. Brands often set their own pricing based on the manufacturer’s suggested retail price (MSRP) in order to anchor the value of their products. But retailers often fluctuate their prices between the MSRP and your pricing policy. And if they have a better price than you, they’re probably going to win a greater percentage of sales.
D2C sales often require manufacturers to make such a huge upfront investment in infrastructure, development, and staff. There are different inputs that affect brand’s pricing products lower and this varies from org to org, but if you want to compete with retailers, you’ll need to experiment with coupons, discount codes, and other methods to provide a better price.
4. Make sure you have the resources and expertise you need
D2C sales isn’t something you can just tack onto retail sales, and managing it isn’t a task you can just add to your team’s current responsibilities. It completely changes your business, because you have to start thinking and operating like a retailer.
If you don’t currently have the expertise to manage D2C sales, you’ll either need to train your employees in completely new skills or hire new teams—possibly entirely new departments—to handle your business’ new responsibilities. Taking retailers out of the equation means your organization needs to process transactions, facilitate shipping and returns, handle account management, optimize the checkout experience, and more.
Executing any of these areas poorly can cripple your ability to sell D2C and have widespread consequences for your brand. (People are a lot less likely to buy from you again after a bad experience, and they’re more likely to talk about a bad experience than a good one.)
5. Invest in your ecommerce platform
Since you’re in charge of the shopping experience, you need to put in the time and money to make sure every piece of every transaction goes smoothly, from checkout to delivery. That means deploying popular features and functions consumers are used to, like:
- Guest checkout
- Saved payment methods
- Integration with digital wallets like Apple Pay, PayPal, and Amazon Pay
- Alerts when items are available again
- Payment plans
- Loyalty Programs
- Order History
You also need to provide automated transactional emails with tracking numbers and other information your customers want after making a purchase.
6. Consider the volume you need to sell via D2C
Some businesses exclusively sell D2C. But a lot of manufacturers don’t. Whatever your plan, make sure you actually set measurable goals and objectives, document them, and have them approved by your organization’s major decision makers. This will likely involve a major restructuring of your business and a costly investment, so it’s vital that you take the time to think through all the ways it will impact your company and whether or not it will be worth the cost.
You absolutely need to create a profit and loss statement, determine what percentage of sales D2C has to account for, and see how its profitability would compare to sales through retailers.
Is D2C right for your brand?
D2C can be an extremely lucrative sales model for some brands. But for some, investing in D2C sales is like sailing right into an iceberg. Whether or not it’s right for your brand ultimately depends on your business’s unique circumstances.