D-to-C Brands and Third-Party Marketplaces: An Unexpected Match
According to a recent report from eMarketer, there are an estimated 400 direct-to-consumer (D-to-C) brands in operation today. At their core, D-to-C brands are characteristically the same — each has a unique brand identity and each brings an exceptional user experience directly to their consumers, no middleman necessary. However, we’re seeing that for D-to-C brands, listing products on established, reliable third-party marketplaces like Amazon.com and eBay can be extremely beneficial and profitable.
And while many D-to-C brands may be hesitant to embrace this model for fear of being drowned out, there are ways to embrace online marketplaces in a way that's not only thoughtful and intentional, but also successful.
Why the Hesitation?
As with any business decision, there are risks involved with adopting a new platform or selling model. D-to-C brands are understandably cautious when it comes to third-party marketplaces for two main reasons: fear of losing the customer relationship and fear of losing valuable data.
The consumer relationship is what makes a D-to-C brand a D-to-C brand. Because they're able to interact directly with their consumer, large brands are able to establish strong, trusted relationships with their customers. D-to-C brands worry about third-parties stepping in and offering lower-quality versions of their products that harm their customer relationships and taint the perception of the brand overall.
D-to-C brands are also concerned about the data they may lose when partnering with a third-party marketplace. D-to-C brands typically get direct feedback and data such as on-site behavioral analytics and purchasing trends in almost real time, allowing them to adjust their marketing, advertising and strategies as needed.
The risks, however, can be outweighed and a D-to-C brand can stay true to its roots if third-party marketplaces are incorporated in a thoughtful way.
The Benefits and Key Decisions
Third-party marketplaces have a lot to offer to D-to-C brands, especially when it comes to overall traffic and credibility.
Third-party marketplaces allow D-to-C brands to capitalize on an already established customer base, immediately exposing them to millions of consumers that can increase sales volume. Amazon, for example, has an estimated 197 million visitors per month, a stark jump from the customer bases of any D-to-C brand out there. With the added traffic comes increased credibility. Trust is automatically extended towards the D-to-C brand because of the credibility of the large third-party marketplace.
Even with the benefits, D-to-C brands still worry about losing their carefully crafted identities and stories. However, there are ways to maximize exposure and reach while also protecting the brand.
First, by identifying SKUs that may do better on a third-party marketplace than in their own store and pricing them at lower price points, brands can use sites like Amazon or eBay as lead-generation tools — driving consumers, in turn, to their owns sites to look at the complete line or collection.
Brands can also create highly branded profiles or “stores” with hero images and descriptions, like the mattress brand Purple does on Amazon, to showcase the company itself and its offerings to increase brand recognition and loyalty.
Lastly, brands can use reviews in these third-party marketplaces to their advantage. Research shows that 84 percent of people trust online reviews as much as a personal recommendation when it comes to purchasing a product. Therefore, having solid, positive reviews can not only drive third-party sales, but also traffic to the brand’s own store as well.
So, while many D-to-C brands are hesitant to incorporate a third-party marketplace into their distribution strategy, the change shouldn't be feared because when approached the correct way, they can become a profitable, successful sales channel for even the smallest D-to-C brand.
Olivier Schott is the co-founder and chief marketing officer of Scalefast, a digital commerce platform.