Should My Brand Have its Own D2C Site? Pros & Cons

George Hatch

September 9, 2020

Amazon, Walmart Marketplace, eBay, Instagram—in the digital age, there is no shortage of channels to sell your products on, nor should you immediately rule any of them out. An omnichannel ecommerce approach allows you to give shoppers a seamless customer service experience, it raises your brand recognition, and it increases profits. That’s why it’s important to thoughtfully consider all of your options.

So what about selling on a direct-to-consumer (D2C) website? Here’s what you should know before making the leap.

Pros of the direct-to-consumer strategy

The D2C approach to business is extremely attractive to brands and manufacturers, and for good reason. D2C distribution, when it’s successful, allows manufacturers to cut out the middleman and enter the market directly to sell their goods, giving them greater control over their brand, their marketing, and their reputation.

Furthermore, a D2C site allows brands to offer as many of their products as they’d like at any time of the year (they aren’t limited by the seasonal/limited needs of retailers) and it streamlines the customer service experience. Interactions with customers are more direct, allowing brands to understand them better and address their needs more efficiently. Gone is being at the shifting whims and mercy of marketplaces like Amazon or Walmart. Instead, you’re providing a quality product with a quality experience uniquely your own.

Apple is an example of a D2C brand for whom this approach works very well. Apple has exceptionally good control over their products and the way their products are distributed. Customers know them and trust them to deliver a high-quality product, so they’ll traffic Apple’s website to make their purchases.

Apple D2C site pros and cons of direct to consumer | Pattern

Apple’s D2C gives customers a more intimate experience with their brand than they’d get on sites like Best Buy or Amazon, and because Apple customers are so loyal to the brand, it’s an experience they’ll seek out online.

Cons of the direct-to-consumer strategy

That said, the D2C approach isn’t a quick and easy path to success. It’s important to keep in mind that entering this space puts you in direct competition with sites like Amazon and Walmart. You have to consider what you’re offering that customers could not get from these places or from other places offline.

Because creating a website can be so expensive, it’s important to strategize about what does and does not work for your products and determine logistical factors that may aid or be an obstacle to your brand.

From just a pure revenue source or ecommerce channel growth perspective, I would argue that most brands probably shouldn't have a D2C site, unless there’s some sort of a niche or they’re going to be doing it in another unique way.

Is a D2C site worth it for you?

The equation that brands should focus on when considering if a D2C site is worth it is:

Purchase Velocity (or usage)/Price

If an item is a high-usage, low-priced item, it will be difficult to sell on its own on a D2C site without a specialized experience. If your brand sells a low-usage, higher-priced item, a D2C may be a great fit.

High usage, low-priced items

Low cost products with high usage, like toothpaste, soap, or pens may not make sense to build a D2C site around because customers are getting these products from other sources like Amazon without the additional costs for shipping, and they’ll have little incentive to purchase these products directly from brands.

I don’t know what consumer is going to go out of their way to type in “Snickers.com” to buy Snickers only from Snickers and wait for that package to show up on their doorstep when they could add that product to their Amazon or Walmart or whatever their normal routine grocery cart is.

If you do have a high usage, low-priced item, one thing that might make a D2C site worth it is building a unique customer service experience around your product, such as personalized product packaging, a monthly subscription box, or a one-time holiday gift bag.

Billie D2C site, subscription service, D2C hacks and tips | Pattern

Billie is one brand that sells a high-usage product on a D2C site that might otherwise not work except for the unique customer experience. Billie manufactures razors, and they offer a $9 subscription service that supplies customers with four new razor blade cartridges each month. Since their customers are already regularly buying razors, Billie’s competitive price point, their free shipping, and their monthly delivery service give them an edge up and a great use of their D2C site.

High priced items and luxury goods

For items with high price points and a low purchase velocity, a D2C site may be a great fit. Having a website for these goods allows you to build an intimate customer experience invested shoppers can look forward to and transactions shoppers can trust. This is especially important in the world of luxury goods.

As a consumer, I’m going to want to go to the source. I’m going to want to buy the Gucci bag, and I want it to show up on my doorstep in a Gucci box. I want to have that opening experience that’s very unique and custom, because I just dropped some serious cash, and there’s no way I want to risk that on Amazon or Walmart.

Gucci D2C experience, pros and cons of D2C for ecommerce brands | Pattern

The experiences you build around your brand on your D2C can also increase your name recognition and attract new customers.

Other products that may thrive with a D2C model are tech products, furniture, jewelry, and luxury goods, to name a few.

Consider logistics and shipping

Price points and product usage aren’t the only things you need to consider when considering a D2C. It’s also important to look at the logistics of distributing your product, particularly if you sell perishable items like meat or vegetables. It’s difficult for consumers to trust that products like this will ship to them without spoiling or being tampered with, which makes building a D2C experience around them a big risk.

If I sell chicken breasts in a grocery store, I’m not going to do the D2C site, because it has to ship cold, and the logistical challenges and the cost to ship are just so immense that it doesn’t make sense.

The other thing to look at is the cost to ship your products. When it comes to high-velocity, low-priced items, it’s essentially mandatory that brands offer two-day shipping, otherwise they won’t be able to compete.

If you can’t make that happen financially, you probably shouldn’t offer a D2C site. The more expensive and less volatile a product is, the less necessary two-day shipping becomes.

With the right plan and the right product, a D2C website can be a great channel to grow your brand and the customer experience with your brand. For more information on how you can start a D2C site or more resources for growing your business, contact our Pattern experts below.

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Sept 6, 2022

Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)
Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon set to shut down Amazon Care Amazon is closing its telehealth service, Amazon Care, which launched in 2019 as a trial program for its headquartered employees. Later the service was rolled out nationwide for employees and other companies. The ecommerce giant has now made the decision to move away from the healthcare space, believing it was not the right long-term solution for its enterprise customers. [Read more on CNBC](https://www.cnbc.com/2022/08/24/amazon-is-shutting-down-amazon-care-telehealth-service.html) Peloton closes new deal to sell on Amazon Following a recent deal, Amazon customers will soon be able to buy Peloton fitness equipment on the marketplace, marking Peleton’s first move outside a direct-to-consumer model. According to Peloton’s CCO, there are already around half a million searches on Amazon for Peloton products every month, despite having no presence on the marketplace. Some key products include the original Peloton Bike, retailing for $1,445 and Peloton Guide for $295. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/24/peloton-strikes-deal-to-sell-fitness-equipment-on-amazon/) --- Other Marketplace News --- 60% of Malaysians are buying from local sellers on Shopee A recent survey of nearly 3,500 respondents found that nearly half of the shoppers prefer to purchase from local sellers due to shorter delivery times. Other shoppers decide to shop locally due to the quality of the products made in Malaysia and an interest in keeping the economy running. As a result, smaller local merchants have been able to grow their businesses, and shoppers benefit from shorter delivery times, products of high quality and supporting local businesses. [Read more on The Malaysian Reserve](https://themalaysianreserve.com/2022/08/25/around-60-malaysians-are-buying-from-local-sellers-on-shopee/) Flipkart’s social commerce platform Shopsy crosses 100 million users Flipkart launched a social commerce arm, Shopsy, in July of last year, which has now surpassed 100 million users, ahead of its target timeline being the end of 2022. This acquisition of new users has made Shopsy one of the largest platforms of its kind in the country, and is expected to onboard a further 100 million by the end of 2023. The platform is centred around boosting local entrepreneurship and powering ecommerce for consumers across tier 2+ regions where users face challenges around trust and navigation when shopping online. [Read more on Business Standard](https://www.business-standard.com/article/companies/flipkart-s-social-commerce-platform-shopsy-hits-100-million-users-1220828006851.html) Meta joins Amazon and Walmart in bid for Indian ecommerce market Amazon mentioned earlier in the year that it would be building a logistics division in-house through its purchase of a 51% stake in Ecom Express, an end-to-end logistics firm, to make ecommerce deliveries more efficient in the country. Walmart operates Flipkart in India and is set to continue its investment in the marketplace. In an effort to compete in the Indian ecommerce market, Meta has partnered with Indian ecommerce company, JioMart, to offer customers a grocery shopping platform within its WhatsApp chat feature. [Read more on Pymnts](https://www.pymnts.com/news/retail/2022/meta-joins-amazon-walmart-indian-ecommerce-market/) --- Other Ecommerce News --- Ecommerce in Spain worth €57.7 billion in 2021 Spanish ecommerce saw 11.7% growth compared to last year, largely attributed to cross-border sales. In the final quarter of 2021, ecommerce sales in Spain were at €16.9 billion euros, at least 60% of which came from cross-border sales. Transactions from foreign locations to Spain generated a turnover of €1.56 billion in Q4, a growth of 27.7% compared to Q4 a year before. [Read more on Ecommerce News](https://ecommercenews.eu/ecommerce-in-spain-was-worth-e57-7-billion-in-2021/)
Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)