These questions are often overlooked and lead to problems if not addressed early.
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The past few months have been an accelerator for e-commerce, and one particular sector that has grown in popularity is the Direct to Consumer (DTC) sector. There's a common misconception that DTC is all about eliminating the middleman in order to make a profit, but that's easier said than done. A DTC brand is usually sold online through an ecommerce store and specializes in a particular category and market before scaling to other categories. Some DTC brands are also opening a limited number of physical retail stores in addition to their main e-commerce platforms.
Before you launch your DTC brand, you need to know why you want to do this and if you are ready for it. Before you begin, don't forget to ask yourself the following questions:
Have you thoroughly analyzed what you (and your team) are good and what is not?
It's difficult, especially at the beginning. As a DTC brand founder, you are well versed in a few aspects, but there are a few aspects that you are weak on. Instead of training the weaker aspects in a short amount of time, hire a team that is the best at your weak points and let them help build the brand. It could even mean hiring a free co-founder depending on the skills you're looking for.
Similar: 5 Tips for Scaling a Successful Direct-to-Consumer Brand in 2020
Are you ready for end-to-end customer journeys and do you have the right platform?
If you take the ecommerce route, you will create the website you have always dreamed of. Building a good website that makes the customer journey great is difficult. Websites and co-founders often take the customer journey for granted. If you really want to stand out as a brand, think about the best ways to improve the customer journey.
A good place to start here is to choose a platform that will help you scale. You have several options like Shopify, WooCommerce, and SquareSpace. It's easier to start with a scalable model than to switch when you're fine. It is really crucial to evaluate which platform is right for your company in the long term. Each e-commerce platform has its own features and capabilities. Ideally, you should choose a platform that is affordable, scalable, secure, easy to use, allows seamless payment, and is customizable.
Are you ready to go?
If you plan on going to DTC, you will likely need to store the products in a warehouse that is either rented from you or operated by a third party. This is where you pack and ship the products. As the business grows you will find that this is an area that requires over-planning. It can get extremely time consuming and distracting if you don't plan ahead. Assess your skills and work to make sure the supply chain is solid. If you think it would be better to outsource fulfillment, get a third party logistics partner (3PL) early in the relationship and help fulfill orders.
Related: 4 Things The Fastest Growing Direct-to-Consumer Companies Do That You Don't
Why should a customer buy your product?
Give your consumer multiple reasons to buy your product or service. In this day and age, consumers have several options. What does your brand offer that other brands don't? If you can answer this confidently and your customers believe in it, you are on the right track. If you're a brand considering expanding from retail to D2C, be creative about what you can offer that your retail partners cannot.
How will you generate sales?
To really get your startup up and running, you need to generate sales. The sooner and at the lowest possible cost, the better off you will be. Early sales also help with early feedback to improve your products and services. Unfortunately, many business owners ignore the important conversations they have with their first customers and fail to develop a competitive advantage before others do or their company goes out of business. Make sure you have answered this question before you begin.
Are you thinking of keeping it safe?
A key component that is often overlooked is the power of retention. The won customer is only the first step on the journey. DTC enables you to own the trip with the customer. Make sure every touchpoint is improved. Nurture the relationship more deeply and build honest long-term relationships. This helps build the brand and allows for greater profitability. The cost of a returning customer is much lower than that of acquiring new customers. Having this as a mindset before you start is far more important than an acquisition mindset.
Put every effort into bringing a DTC brand to market. It will take time. It takes a lot of research, testing, and continuous improvement. What can really make or destroy your brand is your belief in the idea and your team. As you continue to grow, scale your strategies to maintain relationships with everyone involved, including customers. They can help you improve your products, services, and business. It won't be easy, but with the right attitude to growth and take-off steps, a DTC business can work.
Similarly: omnichannel is not the death of the consumer brand; It is the path to growth. Here's why.