Ecommerce and direct to consumer (DTC) sales skyrocketed amidst the pandemic. Many were unprepared for the influx of ecommerce traffic, and unprepared to shift to an online sales model. Whereas before the pandemic, many brands might have questioned, “What does DTC mean and is it the most effective method of selling?”, brands today understand that the immediacy and convenience of ecommerce is the future of retail.
For ecommerce retailers, developing DTC sales channels is a strategy many are adding to their growth plan. However, it can be challenging to know where to invest time and effort to get the most return. One of the main questions typically is: when it comes to selling on an ecommerce website vs. marketplace, what’s the right DTC channel for your business? Plus, what does direct to consumer mean? Breaking down the complexities first starts with a definition of each.
Selling on an ecommerce website means the DTC retailer sells their products by using an online shopping platform, such as Shopify or Magento, to help build their stores. Alternatively, a marketplace is where retailers sell their goods and products through a third-party platform, such as Amazon, eBay, or Etsy. Many retailers have a website without having a presence in the online marketplace, and many choose to sell only through marketplaces without additional DTC channels. Others include both as part of their sales and marketing strategy.
When deciding what’s best for your ecommerce business — website vs. marketplace — it’s important to break down the benefits and drawbacks of each, as well as explore how the two channels can best work in conjunction.
Benefits of Selling DTC Through Your Website
Both DTC websites and marketplaces can lead to ecommerce success, though there are a few distinct advantages of maintaining an ecommerce website vs. marketplace presence worth considering.
Brand and Creative Control
First, you maintain complete control over the design, functionality, and navigation when you own and operate your digital storefront. Your website is yours to curate, stock, and design as you like, in a way that best reflects your brand and what it has to offer.
With creative control comes the ability to iterate and update your site regularly with products, functionalities, and opportunities for customer engagement. Most ecommerce website platforms offer easy-to-use templates to get started, and make design and development tools for ongoing customization, which means you can get an online store up and running quickly and develop based on customer feedback.
Ownership of Customer Data
Another advantage of an ecommerce website vs. a marketplace is the retained ownership of customer data. The cost of customer acquisition is high, and there’s real value in growing an audience base and maintaining those customers. Customer data, like purchase history, preferences and lifetime value, can drive better marketing, merchandising, and drive repeat purchases.
Conversely, when a customer buys a product through a marketplace, the marketplace “owns” that customer and their information. Selling through a third-party, there is no opportunity for a feedback loop with the customer. With a website, you can share news and information and provide places for customer feedback, like a post-purchase survey. You’ll collect useful data that helps you determine what the shopper likes (and doesn’t like) as you continue to improve and expand your offerings.
No Third-Party Seller Fees
There are no seller fees to bake into your operational costs when selling through an ecommerce website. On the other hand, when using a marketplace platform like Amazon, you will be subject to seller fees, which include expenses to store, ship, and sell your products. These can vary depending on the type and amount of inventory you have and how fast it’s selling. Costs are variable and subject to increase as demand increases.
Less Visibility to Competitors
With an owned website, there’s no competition or distraction away from your product. People that land on your site have either entered your URL directly or searched for what they needed and found your website in the results. Either way, when customers go directly to your website to buy, yours is the only product available versus comparing similar products and brands, as is the case with marketplaces.
Benefits of Selling on a Marketplace
When choosing to sell on an ecommerce website, you have more operational and creative control over your brand and offerings. However, marketplaces offer convenience and built-in benefits that can make it an equally alluring DTC channel for your business.
First, with an online marketplace, you have a built-in audience. With over 80% of shoppers using Amazon, your ecommerce store has immediate access to this consumer base without having to build up a specific audience of your own. Keep in mind, though, with greater access comes greater competition with others in the space, which means you’ll need to focus on the quality of your marketplace storefront with updated and optimized product descriptions, images, as well as competitive pricing and shipping.
Customer Service Assistance
Second, an online marketplace takes care of all customer service issues. From product ordering to shipping and returns, a marketplace’s customer service teams are the ones handling any feedback. With your own website, you are in charge of responding to customer requests or complaints, a task that can quickly become time consuming as you grow.
Seller Tools to Maximize Sales
Third, many online marketplaces offer seller tools to make it easier for you to sell and grow. After all, the more sales you make, the more profits they make as well. These tools are limited, however, and you won’t access the most critical customer data that is retained by the platform.
Convenience of One-Stop Shopping
Fourth, consumers appreciate the convenience of buying multiple items from different categories all in one place with low-cost or zero-cost shipping that gets them what they need quickly. Rather than source items from different websites or brick-and-mortar stores, it’s likely they can fill one online cart with everything they need, making checkout a breeze, but again, increasing competition.
How Do These Two DTC Channels Work Best Together?
By weighing the pros and cons of a website vs. marketplace, you can also determine how to use both channels to best build an omnichannel business to best serve customers wherever they are shopping. Your website could be largely focused on building your brand and offering the personalization customers are looking for through reward offerings, promotions, and valuable information about your products.
On the other hand, a marketplace is a place to grow your audience by attracting new customers. It’s easier for consumers who are using a platform they’re already familiar with to discover your brand when in the search for everyday items. Diversifying your brand reach across different channels also keeps you from solely relying on one area to grow and scale your business.
Additionally, it provides consumers more options for how they connect with you. When one site is down or there’s a disruption in a supply chain with a third-party marketplace, you have another avenue where people can make their purchases.
Flowspace Integration for DTC Ecommerce Brands
Choosing Flowspace gives you an omnichannel, ecommerce order fulfillment solution with flexibility to sell across these two main DTC channels. Whenever and wherever your customer places an order, Flowspace will make sure the order is fulfilled. With its robust integration capabilities, you can link up your current website or marketplace profile seamlessly and within minutes.
The Flowspace platform allows you to view all your orders, inventory, and shipment data in one place to ensure you have the most accurate and up-to-date information needed to make decisions for your business, along with the customer data you need to grow. By implementing an omnichannel strategy with the help of Flowspace, you can accelerate your company’s growth.
Quick shipping is one of the main factors consumers consider when making an online purchase. Flowspace’s network optimization algorithm determines the optimal fulfillment centers for your brand, closest to your consumers, enabling fast shipping at affordable rates.
Real-Time Inventory Visibility
The Flowspace platform provides real-time visibility into orders and inventory, and offers a predictive view of what’s remaining to help determine when it’s time to reorder. With optimally allocated inventory, the platform gives a birds-eye view of what product is where, making oversight and replenishment a breeze.
DTC companies work hard to establish their brands, and customers attach high expectations to product quality and the brand experience. With Flowspace, branding can be whatever you want it to be, so when customers receive their purchase, it’s in line with how your company presents itself online.
As ecommerce sales continue to skyrocket, the time is now to set your brand up for success with a powerful online presence, and the omnichannel fulfillment capabilities to deliver to your customer’s door. Find out how Flowspace can power your brand experience today.