Tired of handing your profits to retailers? Wondering about the benefits of direct to consumer (D2C) eCommerce? We’re weighing up the pros and cons in this handy guide.
Retail is no stranger to seismic shifts in its landscape. The traditional supply chain still works for some businesses, but will this be the case forever? The evolution of eCommerce is driven by the customer; why distance yourself from the beating heart of progress?
For businesses thinking about selling direct to consumers, the evidence is compelling and the rewards can be huge. If you do it right.
What is the direct to consumer eCommerce model?
Traditionally, manufacturers sell to customers via a chain of wholesalers, distributors, and retailers. In D2C eCommerce, manufacturers cut out those middlemen and sell to customer themselves.
The traditional retail supply chain
The traditional supply chain is a child of brick-and-mortar retail. Realistically, customers aren’t going to physically visit your factory and queue up to buy. You might have one facility producing goods for an entire country, asking someone to drive across the land to buy replacement car parts is a big ask.
That makes the logistics of shipping, warehousing, and distribution necessary. De-centralizing the number of locations where customers can access your products increases their availability and enables sales.
That was then.
The rise of direct to consumer eCommerce
The meteoric rise of eCommerce lets customers buy from wherever and get stuff delivered wherever. Stock can be stored on site where it’s manufactured and distributed to customers via your own fulfillment service.
Remember, all those wholesalers, distributors, and retailers from the traditional model are going to take their fair cut from the process. D2C cuts out the middlemen, streamlining things. This translates to savings which you can split with your customer.
If it sounds like a no-brainer so far, you might want to hold your horses. See, the term ‘middleman’ is often spat like a dirty word in business, almost synonymous with ‘parasite.’ In the real world, that’s simply not the case.
Those middlemen are doing an essential job getting your product in front of customers. Logistics, marketing, customer service; all these and more become your responsibility if you decide to go down the direct route. A solid strategy is essential, so you need to ask yourself…
Should your business use the D2C eCommerce model?
This is almost a trick question. Regardless of whether your business goes for the direct to consumer eCommerce approach or not, your customer definitely is.
Follow the customer!
Studies show as many as 59% of customers research purchases directly on a brand’s site, and 55% now prefer to buy direct from manufacturers rather than retailers.
In the US, 40% of shoppers expect to be making over 40% of their purchases from D2C brands in the next five years. As technology advances to erase the friction from this model, those stats are only likely to increase.
So, if you’re following your customer, the smart money is on D2C. It bears repeating that the Blockbusters of this world went the way of the dodo because they refused to adapt to changing consumption habits.
Take control of your brand
Perhaps the biggest advantage of D2C eCommerce is that you take full control over you brand conversation.
Your eCommerce marketing efforts become fully focused on customers, not wholesalers and distributors, some of whom are engaged in their own marketing efforts.
This lets you focus your messaging with a precision which wasn’t possible before. You can create a personalised digital experience for customers, saving their preferences and targeting marketing to deliver maximum value.
With that being said, if you’re transitioning from a traditional supply chain to a D2C model, you’re going to have to have a tough conversation with your existing wholesalers, distributors, and retailers.
The change might not happen overnight, or you might prefer a hybrid model where you sell both D2C and through middlemen. But history shows that making the jump can be highly lucrative.
D2C examples and success stories
Thankfully, your business doesn’t exist in a vacuum. By studying the examples set by successful D2C pioneers, you take some of the sting out of the transition. A good place to start would be these three D2C eCommerce megastars who knocked it out of the park.
Dollar Shave Club
Dollar Shave Club almost need no introduction by now. They saw that the ‘blades and razors’ model of selling a cheap base product with costly top-ups had become outdated.
They seized the initiative with a low-cost customizable subscription model. Customer service is central to their success. Subscriptions can be cancelled any time, returns are easy, and the site is a dream to navigate.
But we all know the real triumph of Dollar Shave Club is their viral video which, at the time of writing, sits on a cosy 26.8 million YouTube views. Proof that bold, clever marketing statements still cut through the noise.
Casper Beds didn’t just spot a tiny niche in their market’s purchase journey. They realized the whole process of buying a bed was deeply unpleasant and decided to do something about it.
One of the objections to the D2C eCommerce model is that customers want choice, that they’ll prefer to compare several products rather than be restricted to one product for one purpose from one supplier. Casper turned this misconception on its head by limiting their range to one fine-tuned product.
By providing one great bed at a fair price, direct to your door, they sold $100 million worth of these beds in two years. This was driven by a meticulous SEO strategy to break through and get seen. It wasn’t easy or cheap, but it was worth it.
Then there’s Soylent, whose agility and connection with their audience are astounding. Marketed to the tech geek crowd, these meal replacements are constantly reinvented and given ‘version numbers’ as one would do when iterating software.
Such is the strength of the dialogue between Soylent and their audience that their branded subreddit currently has over 36,100 members, and still develops products in line with feedback from these users.
The brand has taken a few knocks in its history, it was famously banned in Canada, but there’s a lesson to be learned there for any aspiring D2C brand. A strong connection to the audience helps you weather the storm. After all, when you name yourself after a sci-fi food which was made from people, you’re definitely signalling to the tribe.
A common theme among successful D2C eCommerce brands
If you’ve spotted something connecting these three stories, it’s their ability to leverage the digital sphere to get themselves in front of the right people.
The importance of eCommerce marketing in the D2C world can’t be overstated.
Perfecting your digital marketing strategy for D2C eCommerce
D2C eCommerce is made possible by digital channels, particularly social media where much of today’s marketing happens. That’s where the hard work begins, because digital marketing is a highly competitive arena demanding a solid strategy.
Social media marketing
Social media marketing isn’t the free exposure it once was. Many platforms now require paid ads to gain any traction, so be sure your money is going to the right places. If you’re a wholesaler thinking of switching to direct to consumer eCommerce, make sure you factor this cost in!
LinkedIn is a good place to sell office supplies, but you won’t sell much clothing there. Likewise, Instagram is a hotspot for flashy accessories, but less useful for corporate branded merchandise.
Search engine optimisation
(SEO) ensures you’re speaking your customers’ language by using the right keywords in the right places. Optimizing your website secures exposure for your brand, while optimizing product titles and descriptions gets eyes on the goods and drives sales.
It’s not easy though, and can take time to generate traffic. In some ways this is a longer-term initial investment for business looking to go down the direct to consumer route.
User generated content is perhaps the greatest testimonial of all. It’s also a marketing tactic that is digital in nature and therefore favors D2C eCommerce merchants.
Ask happy customers to upload themselves to social media using your product, along with a short snappy custom hashtag, and you’re golden. Leveraging Facebook groups and Reddit to build a vibrant, engaged community is always time well spent. It won’t cost you anything either!
Influencer marketing lets you target pre-existing communities within your eCommere niche. You don’t need to spend Kylie Jenner money either. A well-planned campaign backed by a handful of micro-influencers on Instagram can get eyes on your brand and spark a conversation.
Review your digital strategy periodically, say every six months. This lets you communicate with consistency while still reacting to changing trends and customer behavior.
Related article: 20 Essential eCommerce Marketing Tactics for 2020
eDesk takes the stress out of D2C eCommerce
Whatever channels you use to when selling direct to consumer, you’ll need to give all your new customers the care and support they deserve. Using eDesk, the world’s leading eCommerce customer service software, is the best way to provide that.
eDesk integrates with every major online marketplace in the world, as well as all your social channels and inventory management software. This means you’ll have a single place for all incoming customer queries, with the required information to solve their issue immediately to hand.
As well as a consolidated inbox, eDesk has several time-saving features to make eCommerce customer service a walk in the park. The magic wand feature uses artificial intelligence to suggests suitable responses to customer questions. This enables you to solve customer support tickets with the click of a button.
Did you know that over 60% of US online retail purchases were made through Amazon last year? Amazon’s hold over eCommerce is well established, with 9.1 million active Amazon sellers worldwide and an average of 66 thousand orders per day. Newer sellers may be wondering how they can get more sales on Amazon in such a competitive environment.
The truth is, they absolutely can because with Amazon’s booming market share come many opportunities. We’ve assembled this digestible list of 14 quick wins and strategic moves, to help you up your game and sell more on Amazon.
1. Do keyword research
Having the right keywords can be one of the most important tactics in reaching your target audiences. Using the keywords that are common to searches for your products is the objective, but search engine optimisation (SEO) is a constantly evolving game. That means that keywords used successfully in the past may not be as effective with updated search engine algorithms today.
The terms used by customers to find products change daily and are affected by seasonal, cultural, and economic factors. Hence, it’s important to stay on top of the latest SEO trends and make sure you cast a wide net when implementing keywords for each product listing.
Each product should be optimized with as many relevant keywords as possible – into the hundreds! This gives you the best possible chance of getting your products found by customers, helping you sell more on Amazon.
Amazon keyword research tools like Helium 10, SellerApp, Jungle Scout, and AMZ One can help by generating a list of related keywords with search volume, competition level, and other useful metrics, making it easier for you to choose the best keywords for your product listing
2. Use a repricing tool to get more sales on Amazon
When it comes to sealing the deal and making a sale, price is a main deciding factor for many customers. As an Amazon seller, you always want to make sure you’re pricing your products competitively, but equally, you don’t want to lose your margin!
This is something that using repricing software can help with. Repricing software automates the pricing process in real-time, ensuring your prices stay in line with those of competitors, and with market fluctuations, while you get more sales on Amazon.
Repricing software also has many customisable features that allow you to set prices at optimal levels to help drive sales, without compromising profit. It’s worth taking a trial to see how it can help lift your sales.
3. Get more Amazon reviews
Online reviews are important to spread confidence through word of month and for building credibility for your brand. It’s also a fact that 72% of shoppers won’t buy until they’ve read reviews of a product from people like themselves – people they trust.
Even a strong product with great marketing behind it still has to overcome the fear of the unknown if there’s no social proof. Plus, positive reviews are a significant factor in deciding which products win the Amazon Buy Box.
4. Provide great customer service
Customer service is absolutely essential in eCommerce. Offering top-quality customer service not only adds value, but helps retain customers. A big part of making a sale is assuring the customer that they can trust you to deliver, and that trust is hard earned but easily lost. Providing good eCommerce customer service is critical, and committing to providing great customer service is all the more so!
As an Amazon seller, you need to be on top of your customer service. Responsiveness, a friendly manner and quick and easy resolution processes are all ingredients that make for a winning approach to great customer service.
But it can be confusing trying to streamline it all. Thankfully, there are all sorts of tools available to make this job easier, like helpdesk software to keep all your customer interactions in one place. This helps you to respond quickly and accurately to customer inquiries when they come in, so that your customers always know you’ve got their back.
5. Leverage Amazon seller tools
The best part about being an Amazon seller is that you don’t have to go it alone. There are numerous tools available to help you maximize your business and get the most out of selling on Amazon, whether third-party or FBA.
From repricing tools, to help desk software, to review software and even shipping assistance, many tools exist on the market today that specifically help Amazon sellers optimize their listings, prices, feedback, shipping, customer service and even their taxes.
There are many different seller tools available, so it’s worth reading about options and making an informed decision about the right ones to choose for your business. With the right tools, you can grow your business more than you ever thought possible.
6. Get more sales on Amazon with ads
Running ads is almost guaranteed to help you get more sales on Amazon, but it’s easy to just throw money at them and hope for the best. You can do better! Pay attention to your advertising cost of sales (ACOS) metric, the figure for how much ad spend you need in order to make a sale.
By advertising more efficiently, you lower your ACOS and ensure you get more bang for your buck. Over time, you’ll learn what works and you can employ a strategy with regards to how you run your ads. Taking an insight-driven approach to Amazon ads results in a more profitable Amazon business!
7. Optimise your product pages
The old saying goes that 80% of readers never make it past the headline of any piece of content. That means once you’ve written your product title, you’ve effectively spent 80 cents of your dollar.
When writing product titles, stick to the formula of:
- Brand name
- Product name
- Features (size, colour, gender etc).
This lets you include the right keywords in the right order to immediately tell shoppers that this is the product for them.
Moreover, making sure to visually design your product pages so that they’re clean, simple and easy to read will also help win over shoppers. No one wants to read through a cluttered page. The more straightforward (yet informative) and the cleaner you make your design, the more likely you’ll be to win over those elusive eyeballs!
8. Win the Amazon Buy Box
The quickest way to get more sales on Amazon is by ensuring that your products show up consistently in the Amazon Buy Box (the area in the top right of a product page, where shoppers can ‘Add to Cart’ or ‘Buy Now’). This is because over 82% of sales happen through this highly sought after space.
Although the exact formula to win the Buy Box is unknown, there are a few things that we know are essential. These are mainly metrics that prove the seller is providing a good customer experience. Customer reviews play a big role here. The more positive reviews a seller can amass, the likelihood of winning the Buy Box increases.
In addition to reviews, something else that’s obviously very important to Amazon shoppers is price! By using repricing software, you can automatically set your prices at the optimal level to win the Buy Box and maximize profit, even if you’ve got an enormous inventory.
9. Amazon account health rating
The Amazon account health rating (AHR) is a new feature that helps you monitor your account health based on its adherence to Amazon seller policies.
It considers both negative factors (such as the number of unresolved policy violations on your account) as well as positive factors (how your account positively impacts the customer experience through its selling activities).
Each account will be given a rating, which is regularly reviewed as Amazon monitors the performance of its sellers. If your account is off-target, you will be notified so that you can improve your performance. Conversely, a good AHR rating will work in your favor, helping assure customers that they’re doing business with a compliant seller.
10. Maintain your Amazon SLA
A big part of being a seller is cultivating trust with your customers. That means showing them that you operate in an above-board manner and that you’ll make good on your promise of fulfillment to them. One way of doing that is by making sure your Amazon store has a Service Level Agreement (SLA). This is a promise to your customers that they’ll receive their orders on time. When it comes to fulfillment, the SLA is based on the capacity to fulfill open orders and on-time shipping and delivery.
SLAs help manage customer expectations by defining standards and outlining circumstances under which you as the seller won’t be liable for unfulfilled promises (e.g., natural disasters preventing shipping, etc).
eDesk’s customer service solution is designed to alert you when your SLA is expiring, so your business is never caught without one. Having a current SLA helps you maintain transparency with customers, thereby building trust which helps ensure customer loyalty.
11. Focus on products that already sell
Most ambitious business owners want to try new streams of revenue, but it’s important not to lose sight of the things that are making you money now.
By doubling down on the products that already provide your Amazon store with a reliable revenue stream, you not only deliver to market demand but ensure that you have the financial runway required to take risks on innovative new products, if need be.
Review your financial statements every quarter and look at the items that are performing best in your store. Think about how you can continue to market these with ads, SEO keywords and upgraded images to maximize their selling potential in your online store.
12. Sync your inventory
Inventory can be a delicate balancing act. Hold too much inventory for too long and you need to pay over the odds to store it. But hold too little inventory and you lose out on vital sales, or even customers, due to an inability to fulfill. Amazon can also penalize you if your inventory performance isn’t up to standard.
Stock control is something every seller needs to understand and have the capability to manage for optimal results. Smart inventory management is an under-appreciated way to increase your Amazon sales and profit margin. Fortunately, there are tools that can help. Investing in the right tools and software can help sellers take the stress out of balancing supply and demand.
13. Expand into new Amazon marketplaces
Amazon currently has 20 marketplaces around the world, which include the US, Canada, Mexico, UK, France, Germany, Italy, Spain, Japan, Singapore, Brazil, Australia and more.
You can scale your brand by moving into some of these marketplaces. This can involve doing market research to find out which products are popular in each market and then uplevelling your shipping operations in order to be able to ship globally.
But expanding into new markets also means you’ll need to take language into consideration and localize your listings so that they feature each marketplace’s local language and SEO keywords in the appropriate language. Multilingual customer service is also needed in order to be able to service customers across various marketplaces in their local language.
Sounds complicated? It doesn’t have to be. eDesk’s help desk solution is designed to support customer service and workflow in multiple languages, so you can expand your business without investing in the overhead of hiring a global team.
14. Spy on your competitors
Ok, maybe “spy” is a bit of an exaggeration, but profitable sellers are always on the lookout for what their competitors are doing. You want to make sure you’re offering the right inventory for your market at the right prices. Repricing software will monitor this for you, taking the guesswork out of pricing at the right levels.
Using data gleaned from helpdesk reporting can also help you gather valuable insights and feedback from your customers, which will help you to better understand what customers want and need. Acting on analytics-driven insights from easy-to-read reports means you’re always one step ahead of the competition.
The quest to increase your store’s Amazon sales doesn’t need to be an uphill struggle. There are many resources available to Amazon sellers today to help them optimize their store and develop a healthy sales pipeline.
By staying in touch with how the Amazon platform grows and using the right tech tools to drive your business, you can continue to do what you do best: building a great brand, winning customers, retaining existing customers and improving your bottom line.