D2C stands for DIRECT TO CONSUMER. While traditional businesses sell their products via a chain of distributors and retails, D2C is a style of doing business where the manufacturer or creator of a product sells the product directly to the consumer whether online or offline without any middlemen like distributor, wholesaler, vendor or retailer. When a manufacturer establishes a brand and then sells it directly to consumers, the brand is called a D2C Brand. The manufacturing could be done by the brand owner themselves or via third party. But the sales is directly done by the brand owner without any middlemen. The key identifier of a D2C brand or business is the direct selling of goods to the consumer by the business/brand themselves. Since a D2C brand sells directly, ecommerce sales channels are best suited for such brands/businesses to grow exponentially. Some of the successful D2C brands from India are – Bombay Shaving Company, Lenskart, Pepper Fry, Atomberg.
The key differentiator between a traditional brand and a D2C brand is the sales channel. A D2C brand or business sells its products directly to the consumer via ecommerce or physical outlets. On the other hand a traditional brand sells its products via its distributors, wholesalers and retailers.
The key differentiator between a traditional brand and a D2C brand is the sales channel. A D2C brand or business sells its products directly to the consumer via ecommerce or physical outlets. On the other hand a traditional brand sells its products via its distributors, wholesalers and retailers.
When you are establishing a D2C Brand, the most important thing is to have the Brand Identity in place. A good Brand Identity includes working on the following aspects:
Brand Name
Brand Logo
Brand color Theme
Brand Tagline or Slogan
Once you have finalized the Brand Identity of your new D2C Brand, it is time to get the balls rolling. You do your research on the procurement or manufacturing of your products. But to do business anywhere in the world, you will need a Business Organization. So before you can start work on building your D2C Brand/Business you will need a Business Organization recognized by the government of India. You can choose any form of organizational structure that is most suitable for your purpose. There are multiple options to establish a business entity in India like –
to name a few types of business entity.
Once you have a Business Entity registered, You will require certain registrations and licenses before you can commence your business operations in India. The licenses and registration vary from industry to industry and state to state. Sometimes even city to city. But to give you a bird’s eye view, these are the few licenses or registrations generally applicable across the country –
This is an indicative list and not exhaustive to give you an idea.
The mainstay of a D2C Business is the product. A great product that people would like to buy from a new brand is what is the epicenter of a D2C Brand. Short term success can be achieved by aggressive and smart marketing but for long term success, a GREAT PRODUCT is the most crucial factor. If the product is well differentiated from the competition or is a significant advancement over existing products, the chances of success are very high.
Brand Assets come next in line once you have the Brand Identity in place. The biggest dilemma while starting to setup a D2C Brand is the Brand Name. It rarely happens that anyone decides their brand name without getting drained. Even if you somehow narrow down to a nice Brand Name, it either already exists or has a weird meaning in some language on Earth or the domain is not available and numerous other unthinkable reasons. Many a times, brand owners face multiple issues after launching their brand which leaves them stuck. Someone might sue you with even a similar trademark or may mimic you with a domain with another extension or social media handle. When your product is selling good, the last thing you would want is to change the Brand Name for any god damn reason. A quick checklist to tick in order to have a Brand Name that will not create troubles for the Brand once things go well.
Checklist to select a perfect Brand Name for your Startup or Product
After deciding over a name, you will need a Brand Logo. Brand logo is a highly subjective issue with multiple perspectives. But the basic checklist to getting a great Brand Logo that is widely acceptable and usable is as below.
Checklist for a great Brand Logo –
Once you have the Brand identity in place, you need to setup Brand Assets. By Brand Assets, we here mean Domain, stationary and Trademark.
Register a .com domain along with your regional domain extension like .in for India. This should be good for the start. Later you can buy multiple other extensions to maintain exclusivity.
Apply for Trademark for your brand. Once the application is processed, you can start using TM above your logo. There are different types of Trademark like Device type and Word type. Marketplaces like Amazon need your trademark to have the Brand Name written along with your logo in the application.
If you are an existing manufacturer of the product and now launching your D2C Brand then you can skip this portion. But for those setting up their own manufacturing for their D2C Business, this is important.
A D2C brand can go in any direction. It can either shut down in a month or run for decades or centuries. Scale as you go is the best strategy to setup and run a new D2C Business. Try to launch your brand with the minimum possible manufacturing setup. Many successful D2C Brands were started from the house or room of the founders. Do not invest heavily in your manufacturing setup before validating your product with real unknown customers. Getting your product manufactured via a third part job worker is the best way to start if your product does not involve proprietary technology or ingredients. Things to keep in mind while getting your product manufactured while starting a D2C Brand –
Not all D2C Brands need to manufacture the product themselves or via third party manufacturers. There are many products which can be sourced, labelled and sold directly. In such cases you need to identify the right vendors for your D2C Business. In India, manufacturing is generally divided by region. So one state or region might be a hub for manufacturing of cotton garments while other for synthetic garments. So start by identifying the right region for finding a suitable vendor. Then search online for vendors in that region and then start talking to them and always buy samples before finalizing the orders. Sometimes you may get the right vendor on the first trial itself while sometimes you will have to burn your fingers before landing on to the right vendor. This is a part of creating a D2C brand and do not get demotivated with such setbacks. Proximity of the vendor is also an important aspect. Do not rely on verbal commitments by the vendors and try to keep as much written communication as possible.
As mentioned above, the Sales channels are the key differentiator between a traditional brand and a D2C Brand. So this is a crucial step in setting up a D2C Brand/Business.
All the sales channels involving a middleman are completely out of question. So the list if sales channels are limited already. The sales channels that can be used by a D2C Brand are as follows –
The best place (according to us) to sell your D2C Brand Products is your own brand’s stand alone ecommerce website. You can setup an ecommerce website with the help of a developer or yourself as well. The best website platforms are WordPress, Shopify and Wix. These are drag and drop website builders and are best for most brands. Once you hit a certain level, you may go for a custom website built from scratch for unique features, security or speed. You will be required to integrate a payment gateway and a shipping partner to accept payments online and ship the products respectively.
The best example is Amazon. Online marketplaces act as a platform where multiple sellers sell their good to customers online. Online marketplaces give your new D2C Brand visibility to their huge existing client base giving your brand the initial sales it requires to get off the mark. You can create your seller accounts on these marketplaces and start selling your goods in no time. There are multiple online marketplaces specific to certain niches giving better sales if your product caters to their targeted niche.
Contrary to the widely accepted perception, D2C does not only mean selling online. D2C means selling directly, whether online or offline. So a D2C Brand can sell via it’s Flagship Outlets selling the brand’s products exclusively. A D2C Brand can start with the first store and can expand even via franchising model.
There are hundreds of successful brand selling only via their brand’s social media pages. The most popular and easiest one is your Brand’s Instagram Page. A D2C Brand can get good sales volumes by posting about it’s products on it’s Instagram page and also running Ads for the same without even having a website in place.
Once you are done with the sales channel(s) of your choice, you will have to setup logistics to deliver the orders or collect returns. Online marketplaces provide their own logistics solution in most cases. You will just be required to accept and pack the order. The courier person will come to your place and collect the parcel. For your won website, you can either manage it manually by creating shipments on courier company portals, ship via India Post or integrate courier aggregators like Shiprocket (All these options are for India only). Integration is the best way to go about it as it gives you flexibility and better tracking options. Courier companies charge extra for COD orders for cash collection charges. Online marketplaces will also charge you for the logistic costs of all your returns.
In the present world, branding has become synonymous to a Brand’s social media presence. If you are not visible on Social Media, you are not reaching the consumers. Being present on the major social media platforms is like basic. The major social media platforms active in India currently are –
You need to regularly post on these platforms to keep your brand visible. You can also run ads to increase the followership of your social media pages on the respective social media platforms. Some ideas for content focused on your product are –
Pro Tip – Answer all questions related to your product on Quora with well structured answers.
Branding, marketing and sales are all different domains. All three go hand in hand but the difference between marketing and sales is getting blur these days. To keep it simple, if you are just promoting you brand visibility that is marketing, but if you are pitching directly for the sale of your products it is sales. What might work for one, may not work for the other D2C Business. Marketing channels could be different for different types of products. You need to identity which platform is widely used by your target audience. Though it is rare these days, but if your target audience in not widely active on Instagram, it does not make any sense to run marketing campaigns for your D2C Brand on Instagram. Similarly, if your product is targeted to youngsters you might not get good results with Google Ads. If you understand this and choose the right marketing platforms, you can save a lot of money that would be wasted on running marketing campaigns on platforms irrelevant for you. You can even run pilot campaigns with small budgets to test the waters on each platform and find the best ones for your D2C Business marketing. This will work well for the digital marketing of your D2C Business. Whether your sales are via ecommerce or physical stores, you will always need digital marketing in the present times. Offline marketing campaigns have lost their charm in current times and are often very expensive unless you you find some really creative ways to use offline marketing to boost your D2C Brand sales.
Influencer marketing is huge these days but just sending products to each and every influencer will not add any value to your D2C Brand. The basic Influencer marketing process should be as follows –
The major marketing channels perfect for D2C Brand marketing are –
Many D2C Founders focus too much on cost cutting limiting their business growth. Though it is best to save every penny but spending a bit on basic automation is what sets the successful D2C businesses apart from the unsuccessful D2C Brands. Using basic automations will save you a lot of time, reduce human errors, increase sales and most importantly look professional to the customer. some of the examples of basic automations every D2C Business should use are –
The long term success of your D2C Business depends on how happy your customers are and whether they come back or not. A key ingredient for customer happiness is having a great customer support. You can win customer trust by providing an effortless costumer support. Initially, you can handle it yourself but later you will need a dedicated team to handle customer complains, order related queries and product related questions. This is often ignored by D2C Brands which leads to high customer dissatisfaction and low repeat purchases. Without repeat purchases, your brand will always be dependent on expensive digital advertisements with poor ROAS and high CAC. Do set up professional mail IDs with you own domain.
SEO stands for Search Engine Optimization.
Currently, the internet search is dominated by Google and thus SEO is used to rank your website higher in the search results on Google. Whenever someone on the internet searches for the product category you are selling, your website should appear in the first page of the google search results. In the times of paid advertisements, SEO has lost it’s relevance to certain extent but not completely. If you have your own Ecommerce website then SEO is a crucial aspect. You may not get huge sales volumes via SEO but you will surely get satisfactory organic sales free of cost. This will help you reduce your customer acquisition costs by a bit and will also help you find customers specifically looking for what you are selling, thus increasing the conversion percentage. You can follow these wonderful blogs for implementing basic to advanced SEO on your ecommerce website –
This sub heading is to just remind you one thing – DO NOT FOCUS ON THE LAUNCH.
A launching event is not for everyone. A launching event suits a car manufacturer and not a new D2C Brand or even an established D2C Brand for that matter. Just get the balls rolling as soon as possible. Many a times founders focus too much on the launch event and fail on all other fronts leading to failure of the brand no matter how grand the launch event was.
Let us have a look at the benefits and problems of having a Direct to Consumer Business.
A D2C Brand interacts directly with it’s end consumer and thus have direct access to all customer data. This helps the D2C Business to better understand it’s customer and formulate optimized marketing, branding and sales strategies while also improving or modifying the products as per the consumer needs and feedback. D2C Brands have highly accurate data regarding the demographics, purchasing history, buying habits and much more at the touch of a button.
The D2C brand can create a pleasant experience for the customer and maintain the consistency which is difficult for traditional brands. A customer on the other hand feels a direct connect with the brand which is uninfluenced by any middlemen. Customer experience should be on top of the priority list of a D2C Brand for long term customer relationship increasing the average LTV of customers and building a road to long term profitability
The basic premise of a D2C brand is to sell directly to the customers. So there is zero profit distribution to any middlemen (Except for Online marketplaces and franchisees). This increases the profitability percentage of the D2C Businesses as compared to traditional brands. There is a counter argument to the same stating that D2C Brands have to spend heavily on marketing, but in the present times even traditional brands have to spend heavily on marketing to be in the rapidly ever changing consumer minds. Even if the ultimate increment in profitability percentage may not be mind boggling, it is surely there. Few of the many ways by which profitability can further be improved are –
Being in direct contact with the customers, the feedback mechanism works much more efficiently and effectively. D2C Businesses can take customer feedbacks quickly and improve their products superfast. Good D2C Brands keep customer feedback mechanism smooth and effortless. Customer feedback collection should neither be too intrusive for the customer nor too casual. A good feedback collection system is one where there is least effort required from the customer and all the heavy lifting is being done by the brand itself. Providing rewards against feedbacks can increase the quantity of feedbacks considerably.
A D2C Business sells directly to the customers and thus has complete control over customer experience. Be it placing an order or a welcome at the Brick and Mortar Outlet, a D2C Brand can control everything and improve the same to keep the customer delighted. To understand the same, just imagine visiting a local mobile phone shop versus an Apple Store and the buying experience of both. Many D2C brands get repeating customers for the simple reason of pleasant customer experience. Customers become brand evangelists if treated well. Placing and tracking an order on Amazon is a cakewalk while the same process on most websites is cumbersome. A great product with a great customer experience can hardly fail.
An ecommerce driven D2C Brand can be accessible to a global audience on day one, while it could take decades for a traditional brand to achieve the same. D2C Brands mostly harness this unimaginable power of the digital revolution and scale insanely fast.
Traditional brands ship the goods from their factory/warehouse to the distributors and the chain continues till the product reaches the end consumer. The brand manages the operations only till the goods are out of the factory or the main warehouse. While in the case of D2C Brands, the brand has to manage the operations from the factory/main warehouse till the product reaches the end consumer. Thus there is an additional burden of operations on the part of D2C Businesses. Also, a lot of marketing activities specially at the local level of traditional brands are being taken care of by their distributors/dealers/retailers. But in the case of D2C Brands the entire marketing operations are run by the brand itself and thus lot of operational burden is added to the D2C Business unlike traditional brands.
When a traditional brand appoints its distributors and vendors, it adds multiple parties to its group who benefit from the success of the brand. Thus apart from the brand owner, there are multiple businesses that strive to make the products successful in the market. But in the case of D2C Brands, the onus of making the products successful is entirely on the brand owner alone.
Not all products are fit for D2C. If the traditional distribution system of a product is much more cost effective then the direct delivery mechanism of a D2C Brand then such products can never be successful via the D2C Route. For Example – you cannot deliver one mango candy worth 1 or 2 rupees via D2C mechanism but it can easily be sold via a retail outlet.