In recent years, direct-to-consumer (DTC) brands have become central to the way people shop. Learn what DTC brands are, some major examples, and why so many business owners have launched direct-to-consumer brands.
As the name implies, DTC brands bring their product directly to customers, rather than going through an intermediary, like a department store, wholesaler, or retailer. For instance, if you buy your shoes from Nike’s website, that’s a DTC transaction—but if you buy the same pair from a brick-and-mortar store that carries multiple brands, that’s a B2C (business-to-consumer) transaction.
While a few may have physical stores, DTC companies are predominantly online. They are a major player in the ecommerce world—especially in recent years, as the prevalence of online shopping has dramatically increased.
Because DTC brands primarily operate online, the delivery experience is crucial to the customer’s perception of the brand. Perfecting order fulfillment, whether in-house or through a third-party logistics (3PL) provider, is key to building a successful DTC business.
Direct-to-consumer brands cover a wide variety of industries, but most focus on affordability and accessibility. For many of the top DTC brands, their biggest benefit is providing customers the convenience of shopping directly from their homes.
While you won’t find direct-to-consumer brands in your local department store, chances are you’ve come across them in Instagram ads, podcast sponsorships, and other online advertisements. Some top DTC brands include:
DTC companies are growing for a reason—not only can they be more affordable for both the business and consumer by removing the middleman, they’re easy to start up. They can also give companies more control over marketing, branding, and customer experience.
Going straight to the customer can result in far better margins for DTC companies. By not selling to retailers at a wholesale price, DTC brands can often make more money, and because retailers don’t need to take their cut, the prices are often lower for the customer. This makes things more affordable on both ends while saving money for businesses to spend on advertising and customer experience.
Just selling to an intermediary doesn’t give businesses much opportunity to learn about the people actually buying their product. By selling directly to the customer, DTC brands can get a customer’s contact information and see what they ordered. With insight into customer demographics, interests, and preferences, DTC companies can create more effective, personalized campaigns and product recommendations.
DTC companies get to maintain complete control of the customer’s experience with the brand—from the early stages of advertising to their checkout experience. This allows DTC companies to build more of a relationship with their customers. It also gives them a greater opportunity to highlight their brand’s benefits and company values like ethical sourcing, responsive customer support, flexible return policies, and more.
It’s never been easier to start a DTC company than it is now. All you need is a product, a website, and a way to manage orders, and you’re ready to get started.
Of course, making the brand successful is rarely this simple—after all, advertising is critical for just about any DTC product. But there are significantly fewer overhead costs and barriers to entry to launch a DTC brand than to set up a brick-and-mortar store or sell to retailers. For many companies, the DTC model has allowed them to launch their businesses when they otherwise might not have been able to. It’s never been easier to start a DTC company than it is now. All you need is a product and a website, and you’re ready to get started.
DTC companies are simple to start and can give businesses flexibility and control of their brand they wouldn’t have had otherwise. However, not working with a retailer means that DTC brands need to attract their own audience, rather than relying on an existing one. DTC stores are also responsible for managing orders, shipping and fulfillment, customer service, and handling exchanges.
Direct-to-consumer companies are popular for a reason, and that popularity is only increasing, with 81 percent of customers stating that they plan to buy from DTC brands. With DTC ecommerce stores growing in prominence, even well-established brands are working harder to build relationships with their customers and grow the ecommerce side of their business.
To reach customers more easily, some DTC companies will partner with a third party to expand their reach or sell on online marketplaces such as eBay and Amazon though this can also limit their control over customer experience. Many DTC ecommerce companies will also use an external platform to help them with order management, fulfillment, and shipping, so they don’t have to manage the time-consuming aspect of fulfillment logistics.
Overall, by maintaining a strong online presence and partnering with companies who can help them with visibility and logistics, the DTC model has been—and will continue to be—a worthwhile approach for many brands.
DTC products’ convenience, affordability, and personal branding have made them a critical part of how people shop. But an important part of that convenience comes in the delivery stage, with customers expecting a high-quality experience and prompt order fulfillment. By working with a fulfillment provider like Airhouse that offers deep logistics expertise and an a la carte fulfillment pricing model, you can rest easy knowing that orders will make it quickly from factory to front door without any stress on your end.
Connect with Airhouse to learn how we can help your DTC brand simplify ecommerce logistics, optimize fulfillment costs, and effortlessly scale your business.
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