What is D2C?
How to start selling, and keys to success
D2C (Direct-to-Consumer) refers to a format where products manufactured in-house are sold to direct consumers without going through an intermediary.
Here, we’ll introduce the advantages of selling D2C, and how to sell D2C on Amazon.
Here, we’ll introduce the advantages of selling D2C, and how to sell D2C on Amazon.
4,900 JPY a month (excluding tax) + selling fees
What is D2C (Direct to Consumer)?
D2C (Direct to Consumer) refers to a model where a manufacturer or brand sells products manufactured in-house to direct consumers using the company's ecommerce website or social media without involving wholesalers, retail stores, sales agents, etc. It's easy to confuse D2C and B2C, but B2C refers to transactions between companies and consumers in general.
• B2C (Business to Consumer): A wholesaler or sales agent (company)
acts as a middleman between the manufacturer and the customer • D2C (Direct to Consumer): The manufacturer makes direct transactions with the customer
acts as a middleman between the manufacturer and the customer • D2C (Direct to Consumer): The manufacturer makes direct transactions with the customer
Advantages and Disadvantages of D2C
Main advantages of D2C
- High profitability - Since everything from product development and manufacturing to sales is carried out in-house, it’s possible to reduce intermediate costs
- Opportunities for repeat purchases - Being able to communicate with customers directly can easily lead to gaining more repeaters
- Maintaining brand image - Since everything will revolve around sales from your brand’s website, you can easily create a website that emphasizes the brand’s image
Main disadvantages of D2C
- Building efforts before starting sales are cost-intensive - Building an in-house ecommerce website and setting up production/distribution systems can incur various costs
- Raising brand awareness and attracting customers are a must - It takes money and effort in terms of marketing, etc. to take action, such as attracting customers to your website, and undertaking SEO measures to raise awareness.
- Requires accepting orders and doing delivery work quickly - You’ll need to establish a process to quickly deliver products to customers
With D2C, since you’re selling to direct consumers without going through a company, intermediate costs can be reduced, which increases profit. But on the other hand, when setting up an in-house website, it takes time and money to create the website and do marketing to attract customers. To see tips for launching your own brand, click here
How to turn D2C disadvantages into advantages
Based on the main advantages and disadvantages of D2C described above, let's first consider which sales channel to sell through so that you can successfully sell D2C. Typically, you’ll choose between setting up your own website or selling products on an existing ecommerce website like Amazon.
When selling on Amazon¹, which provides one of the largest domestic services in ecommerce, the disadvantages of D2C introduced above are more likely to turn into advantages.
When selling on Amazon¹, which provides one of the largest domestic services in ecommerce, the disadvantages of D2C introduced above are more likely to turn into advantages.
Amazon
(existing ecommerce website)
Own website
- Own website - Requires creating a website and doing marketing to attract customers, so the initial cost tends to be high. On the other hand, unlike an existing ecommerce website, in many cases the profit margins are high because there are no selling fees.
- Existing ecommerce website - Since there are already many customers, it cuts down on costs for creating a website and doing marketing to attract customers. Tends to have more products from other companies in the same industry, which makes it more difficult to attract repeat customers compared to having your own website.
- Amazon - ecommerce website boasting one of the largest ecommerce services in Japan with a high ability to attract customers. It’s possible to easily start sales promotions with new seller benefits and the sales promotion tools provided by Amazon. It’s possible to quickly deliver to customers with Fulfillment by Amazon (FBA), which is a delivery agency service.
¹JETRO Global Trade and Investment Report 2022
By using an existing ecommerce website that already has many customers, you could start selling online faster and at a lower initial cost. If you’re selling online for the first time, we recommend going with an existing ecommerce website.
Next, let's take a closer look at the advantages that D2C brands have when selling on Amazon.
Next, let's take a closer look at the advantages that D2C brands have when selling on Amazon.
Benefits of Selling on Amazon for D2C Brands
Let's take a look at what advantages D2C brands have when selling on Amazon.
Here are some benefits of selling D2C on Amazon.
Here are some benefits of selling D2C on Amazon.
- Attract lots of customers - Many customers have shopped on Amazon, which has a high market share in various countries such as the US, UK, and Japan¹. That means there will be more opportunities for consumers to shop, including the ones who were difficult to reach with just your brand’s ecommerce website.
- Access to a delivery agency - You can use FBA (Fulfillment by Amazon) services and let us handle shipping, customer service, and returns. Even when considering fees, there’s a high possibility that D2C will reduce the time and costs it takes to receive order, make deliveries, etc.
- A simple listing process - Getting started is as simple as creating a seller account and adding products one product at a time.
- Brand appeal on the product page - Using a function called A+ Content on the product page lets you promote your products and create brand appeal with images, etc.
- Brand store page - You can use free tools (such as creating a brand store) to increase brand awareness on Amazon without compromising your brand style. You don’t need special knowledge to create your web page - the good thing about it is that anyone can easily create one.
- Advertising - Sponsored Product Ads, a function that makes it easier to find products sold by your company from a large number of products, can be operated easily, even by beginners. Also, you can use it to generate reports on sales and performance of ad eligible products and targets, etc. These analyses are useful for identifying strategies and optimizing campaigns.
¹JETRO Global Trade and Investment Report 2022
13.26 million unique visitors (on desktop) ¹, 43.06 million unique visitors (on mobile) ² per month in Japan
This ability to attract customers will enable you to appeal to a wide range of customers, and acquire new customers. First, let's take a look at how selling works.
Here's how it works
Here's how it works
You sell it,
we ship it
Fulfillment by Amazon (FBA) is a service that helps businesses grow by providing access to Amazon's logistics network.
Get details
Get details
Help increase awareness and sales with Amazon ads
Generating ads can help you to increase product awareness, reach more customers, and improve sales.
Get details
Get details
¹ March 2019 Nielsen Digital Content Measurement: Brand Level - Home and Workplace Access
² March 2019 Ranking by Nielsen Mobile NetView Brand
² March 2019 Ranking by Nielsen Mobile NetView Brand
The points above represent the main advantages, but you can probably tell that many of the disadvantages of D2C can be eliminated by selling on Amazon, even with just the points outlined above.
4,900 JPY a month (excluding tax) + selling fees
POINT:
Amazon Brand Registry
Amazon Brand Registry is a program for brand owners that sellers with valid registered trademarks can enroll in. Once you’re enrolled in the Amazon Brand Registry, you can use tools to protect intellectual property, as well as various brand building programs to raise brand awareness.
Tips to successfully sell D2C
Here are some tips for successfully selling D2C brands online.
Point 1. Analyze sales performance and reviews
With D2C, since you can directly communicate with customers, it tends to be easier to obtain the customers’ opinions and impressions. Analyzing reviews of such products and providing products that better meet customer needs will lead to acquiring repeat customers.
Also, analyzing sales performance on a regular basis is critical to successfully selling D2C. Analytics is also where you can evaluate account performance by tracking orders, assessing customer service and returns, running promotions and advertising, and beyond.
Also, analyzing sales performance on a regular basis is critical to successfully selling D2C. Analytics is also where you can evaluate account performance by tracking orders, assessing customer service and returns, running promotions and advertising, and beyond.
If you are a registered brand owner selling on the Amazon store, you can access advanced reports like the following with Brand Analytics.
- Products winning the most clicks on strategic search terms
- Products or brands that customers are reordering (repeat behavior)
- Top products most commonly purchased alongside a product
Point 2. Analyze brand image
Analyze what kind of image customers have of your product or brand. Examples include taking surveys on the web. Figure out whether your customers have the image you want them to have of your brand. If there’s a gap, you’d need to change the content and media that you’re sharing through.
Establishing a brand image is very important for ensuring brand originality and differentiating from other companies' products. Try to be as specific as possible about the type of people you’d like to reach and the kind of value you’re hoping to convey to them. We recommend trying the “persona” method.
Establishing a brand image is very important for ensuring brand originality and differentiating from other companies' products. Try to be as specific as possible about the type of people you’d like to reach and the kind of value you’re hoping to convey to them. We recommend trying the “persona” method.
Specific example of a persona
•Name: Hanako Amazon
•Gender: Female
•Age: 32 years old
•Residence: Living with husband and daughter - three people total - in a rural area
•Occupation: Housewife
•Hobbies: None
Daily life: Dealing with challenges of childcare/looking for a hobby for a change of pace
•Name: Hanako Amazon
•Gender: Female
•Age: 32 years old
•Residence: Living with husband and daughter - three people total - in a rural area
•Occupation: Housewife
•Hobbies: None
Daily life: Dealing with challenges of childcare/looking for a hobby for a change of pace
Point 3. Implement marketing and product promotions
When selling D2C, marketing is vital to helping you start and grow your business. Implementing marketing and promotions will help you reach more customers no matter which online selling channel you use.
- Social media marketing: Since the majority of customers frequently use social media (or social networking services) every day, you can use them to raise brand and product awareness.
- Advertising: Advertising campaigns boost the visibility of your store and products.
- Product promotions: Regularly distributing coupons and offering discounts, etc., and having more customers try out products will lead to increased brand awareness and acquisition of repeat customers.
Once you start selling on Amazon, you can promote sales at great prices by utilizing the benefits of free shipping fees when sending products to Amazon's Fulfillment Centers (logistics bases), and free credits that can be used for advertising. There are many other benefits , so you can execute an effective marketing strategy.
Amazon Advertising
Show off your products
Quickly create sponsored product ads that appear in relevant product search results and product detail pages to make it easier for buyers to find seller products. Pay only for the clicks your ads receive. Run deals or offer coupons to help increase conversion.
Through this article, we hope you’ve gotten a better idea of the advantages and disadvantages of selling D2C, and the reasons for selling D2C brands on Amazon. Why not start selling D2C on Amazon to raise awareness of your D2C brands and further grow your business?
4,900 JPY a month (excluding tax) + selling fees
