From Basic to Pro: How to Manage Your Direct-to-Consumer Business

The new trend making headlines in eCommerce is direct to consumer model, a business model that allows brand owners to sell directly to their consumers without the middle man. This approach enables brand owners to gain access to their customers and more control over prices and revenue.

Why Should eCommerce Brands Choose The Direct To Consumer Business Approach?

One common question in the business community is why I should dive into direct-to-consumer business? Well, because it is the future, and it brings more returns for businesses.

We hate to be bearers of bad news, but the big eCommerce developers (AliExpress, Taobao, Amazon, etc.) are consolidating, making it harder for smaller manufacturers to compete. If you are one of these stakeholders and are yet to consider the DTC model, which enables brands to create a loyal customer base, you may want to think again.

Here Are Some Reasons Why DTC is the Future.

During the pandemic, DTC became a huge trend in eCommerce as more brand manufacturers and sellers began to see the benefit of eliminating the middlemen to maximize profits. The DTC market projections witnessed an upward growth trend of 19.2% in 2021 as the world gradually returned to the status quo.

Given these trends, we predict the DTC model as the way forward. And the fact that popular brands like Nike and Adidas are looking to transition to the DTC approach and reduce to the barest minimum the need for intermediaries says it all.

According to the CEO of Nike, “Digital is fueling how we create the future of retail.”

Benefits of Direct-To-Consumer Business

If you are ever wondering what brands stand to gain from adopting the DTC model, we can summarize them from these viewpoints.

1. Maximum Control:

When using a DTC model, there is better control on the brand identity, reputation, management, and production of the products. And that is the dream of every business.

• Data Accessibility

One of the biggest problems manufacturers face with respect to scaling is accurate consumer data, which prominent eCommerce co-operations possess. This has always left them (manufacturers) at the mercy of the middlemen and retailers, always relying on the data and information provided by these entities. With the DTC model, brands can generate and have more control of their data, thus making more actionable decisions.

• Customer Relationship

In an ideal situation, every manufacturer desires some sort of relationship with their customers, but the presence of middlemen makes it almost impossible. With the DTC model, it becomes a different story. Brands can interface directly with consumers, learn their behavior, and customize their consumer experience.

How to Manage Direct-To-Consumer Business?

Managing a DTC business is not as complex as it may seem, especially when a brand adheres to the basics that govern starting up an eCommerce franchise. Although, brands would need to take care of the following when trying to manage a DTC business.

• Launch an Online Store to Serve the Consumers’ Needs

The first step to adopting the direct-to-consumer approach is to launch your online store. This store’s purpose will be to serve your customers’ needs and to act as their first touchpoint with your brand. You can easily do this using eCommerce SaaS platforms like AllValue. These platforms are usually easier, cheaper, and more sustainable to manage for the average Joe than hiring a web developer to build a platform from scratch.

The bulk of the work setting up a successful DTC business eCommerce would involve creating a strong online presence, which is enhanced if you choose a good eCommerce platform.

• Integrating Business Operations Based On Different Perspectives

Since the direct-to-consumer business model takes a different approach from most conventional business models, eCommerce suppliers considering this paradigm would have to tweak their operational modes to accommodate this new system.

For example, a brand may need to transition from traditional advertising to a digital advertisement format when integrating this new model. We can basically look at some of these potential integration changes from the following perspectives:

1. The operational perspective:

Switching from working with middlemen (suppliers and wholesalers) to catering to the needs of end-consumers would require some structural changes across the board. For instance, it might involve creating a dedicated social media channel to improve brand engagement or streamlining logistics to offer same-day deliveries for end-consumers.

• The performance marketing side

This paradigm shift would naturally impact a supplier's marketing approach as they might have to rethink their customer acquisition strategy and various marketing KPIs.

• Branding Perspective

It is not surprising to find manufacturers who embrace the DTC model adapting their brand message for the new audience. The narrative manufacturers project to middlemen needs to differ from that of their end-consumers, and it requires modifying the unique selling points they project.

• Consumer perspective

A DTC business model is a different ballgame from the conventional models, which requires putting end-consumers first. And this involves establishing multiple touchpoints to meet up consumer demands. It could involve crafting relevant content across social media, email campaigns, etc., to foster engagement and brand loyalty or other measures.

How to Measure for Direct-To-Consumer Business Success?

When measuring the success of using DTC, most people tend to look at the revenue and profit margins, and rightly so. And the question of if the brand is making more right now or before adopting the DTC eCommerce model arises. And by how much? But here are other crucial indexes to measure a DTC business success:

1. Average Number of Purchases: It is time to put aside certain metrics like engagement rates, the number of hashtags, and the likes, to focus on the primary objective of suppliers, which is to make sales. Brands must try to dissect how many consumers visit their eCommerce platform to make purchases and those that are not.

2. The Average Number of Repeat Purchases: Are consumers coming back? If they are not, what is the reason behind that? Measuring this metric makes it possible to optimize a brand's various touchpoints in order to get loyal repeat consumers.

Other important metrics for measuring the performance of the DTC model are;

• Average order value
• The lifetime value of revenue

Conclusion

What the DTC model tries to do in the long run is to increase revenue and brand value. The multiple constraints associated with selling using retail outlets or intermediaries are causing a paradigm shift towards Direct-to-consumer platforms.

But eCommerce businesses can maneuver these constraints by searching SaaS DTC platforms like AllValue for help, which provide sellers with the best option to launching their eCommerce business.

AllValue is a top-of-the-line SaaS platform that delivers high-end eCommerce services for both small and big businesses. We offer some of the lowest prices and robust services out there, making our platform easy for just about any brand to get to market in no time.

Get a feel of AllValue’s offerings for free with our 90-day free trial today at: https://allvalue.com/en!