Direct to consumer (D2C) is an exciting sales strategy that sees you selling products directly to the people who will use them.
Thanks to the Internet, online marketplaces, and eCommerce platforms, selling products directly to consumers is easier and more cost-effective than ever.
All you need to do to get started is find the right platform to make sales, which involves deciding between a marketplace or website.
Recap: What is D2C?
D2C is a business model where you sell directly to consumers, bypassing retailers and wholesalers.
eCommerce has made selling direct to consumer easier, allowing online sellers to benefit from:
- Control over branding, prices, marketing, and the customer experience.
- Profits that reflect the retail price and aren’t diminished by middleman costs.
- Ownership of the customer relationship and market data.
Accordingly, the industry has seen a surge in D2C brands, including Dollar Shave Club, Chewy, and Warby Parker.
Taking Your Business D2C: Marketplace vs. Website
To sell directly to consumers, you need somewhere to sell from, and online, that boils down to two different places: marketplaces or websites.
Marketplace vs. Website: Differences
An online marketplace is a website where you (among other third-party sellers) can list, promote, and sell products. In return, the marketplace charges a monthly fee and/or takes a cut of the final sale price.
The most popular online marketplaces in the USA are Amazon, Walmart.com, eBay, and Wish.
An eCommerce website is a website that you own, where you list, promote, and sell your products. Most D2C sellers will use an eCommerce platform to create their website and manage marketing, sales, and operations.
The most common eCommerce platforms in the USA are Shopify and BigCommerce.
Helpful guide: A 10-step guide to launching your own eCommerce website
Marketplace vs. Website: Audiences
Online marketplaces provide shoppers with variety, low prices, and fast shipping speeds. Accordingly, they attract astonishing audience numbers.
In order of popularity, visits per month average out to:
- Amazon: 5.7 billion
- eBay: 1.6 billion
- Walmart: 469 million
- Etsy 266.3 million
- Wish: 111.6 million
These numbers give your D2C brand potential access to huge audiences, unmatchable SEO, and marketplace-loyal customers.
An eCommerce website comes with no audience. It’s down to you to market your brand, advertise your products, and optimize your keywords to build your own audience and attract shoppers to your website.
While this certainly requires a lot more work than selling via a marketplace, you have complete control over the type of people you attract to your website and how you attract them. For example, you can use Facebook and Instagram Shopping or TikTok Shops to target and attract niche audiences who are more likely to buy your products and stay loyal to your brand.
Tip: Think about the products your D2C brand sells and where your ideal customer is likely to shop for them. For example, suppose you sell generic kitchen appliances that offer no-frills functionality at an affordable price. In that case, your target customers will probably search Amazon or Walmart.
Now, suppose you sell high-tech, smart kitchen appliances that come with a bespoke app that will excite geeks. Your target audience is more likely to find you while searching Google, browsing TikTok, or reading tech news – making it easier to attract them to your website.
Marketplace vs. Website: Cost of selling
Many marketplaces have referral fees, which act as a commission when you make a sale on their platform. This drives up your cost of acquisition and can get expensive the more volume you sell. You can check the costs of selling on Walmart and Amazon, which are usually a combination of a monthly fee and percentage of sales based on category.
There are no marketplace fees when selling on your own website, so you’ll face fewer expenses as you grow. However, there are other expenses that come with running your own website. For example, the development and maintenance of a website, platform fees depending on whether you use Shopify or BigCommerce, and payment transaction fees.
For new brands, selling D2C can also come with a higher cost of customer acquisition without the steady stream of shoppers a marketplace can pull.
Marketplace vs. Website: Retention
Marketplaces have rules against soliciting emails or asking shoppers to visit external websites. They’re also structured to group similar items together to help shoppers find the best price, delivery date, or style they’re looking for. Sometimes this makes it difficult to leave an impression, as the goal of the marketplace is to make a sale — any sale (whether it’s your item or a competitor’s).
Getting a conversion on your own D2C website can make your brand stickier than on a marketplace, where you were just another nameless brand that happened to have the best deal or fastest shipping. You can also offer incentives to register for an account or sign up for a newsletter to give you a direct line to reach your buyers again.
Marketplace vs. Website: Barriers to entry
Online marketplaces have strict entry requirements you must meet before being accepted to sell on the platform. These range from simply having a registered business and competitively priced products to demonstrating significant expertise and experience in selling online.
For example, Target Plus is invitation only, while most merchants can create a store on Wish.
Theoretically, anyone can set up an eCommerce website; however, not everyone has the technical or marketing abilities to design a website and attract customers.
While eCommerce platforms such as Shopify and BigCommerce have drag-and-drop themes that make creating a website easy, they still require a degree of technical familiarity. Likewise, while anyone can set up a Facebook Business profile, creating content that generates engagement involves work and time.
This doesn’t mean you can’t learn how to create and market a website using eCommerce or outsource these tasks to experts; it just requires a little more effort than selling via Amazon, for example.
Marketplace vs. Website: Seller tools
Online marketplaces come with an entire toolkit to help your business succeed and generate sales. These include:
- Product research tools such as Walmart Best Seller Ranking (BSR).
- Sales data to help you analyze and strategize.
- Marketplace ads that push your listings in front of relevant audiences.
- Fast shipping programs that increase visibility and boost sales.
Depending on your platform, eCommerce websites can also come with tools to help you make your D2C store a success.
These tools include:
- Built-in tools, such as Shopify KIT and BigCommerce inventory management.
- Third-party apps, such as repricing tools, product recommendation plug-ins, and live chat.
- Integrations with other third-party tools.
There are a variety of third-party apps available for both marketplaces and your own website, such as listing tools and Deliverr for fulfillment.
Marketplace vs. Website: Sustainability
Online marketplace stores are quick to launch, allowing you to gain easy and early traction for your D2C business.
However, you soon become at the mercy of marketplace rules and other sellers. You have limited control over your brand and the customer experience, and you have thousands of other sellers to compete against. Launching is easy; scaling is hard.
eCommerce websites can be complicated to launch and more challenging to gain early traction on. You must put a lot of effort into designing your store, creating brand awareness, and attracting customers.
But once you do, you have complete freedom to grow your business, create outstanding customer experiences, drive customer loyalty, and grow your business the way you want to. Launching is hard; scaling is easier.
Marketplace vs. Website – Which is best for your D2C store?
Ultimately, the question between marketplace vs. website for your D2C store boils down to what you want for your D2C business.
Marketplaces are ideal if you want to reach a broad audience and create early traction under another brand’s name.
If you want to curate your audience, build a powerful brand, and set yourself up for long-term success, websites are better.
Or you can use both. Start your journey with a marketplace to generate traction and initial brand awareness and then progress to a website to enhance the customer experience and propel your business forward.