D2C For Dummies

Are you looking to get more familiar with the D2C business model? Direct to Consumer has been increasingly popular among brands in recent years.

It can be defined as a model that focuses on selling and delivering a product or service directly to the customer, without the involvement of third-party intermediaries, like retailers or food ordering applications. 

The D2C model carries many benefits, including control over profit marking, personalization, and lower fees.

That is why more and more brands, like food franchises, are moving towards having an independent ordering platform, as opposed to collaborating with third-party providers.  

In 2022, direct-to-consumer (D2C) eCommerce sales in the United States will reach $151.20 billion, a growth of 16.9%, compared to last year.

In this article, we will get into the details of what are the benefits of starting out a D2C business or opening a D2C platform for an existing business. 

What are the benefits of the D2C model? 

Controlled profit margin 

The number one reason why brands are starting to shift towards direct-to-customer is the fact that it provides them with more control over the profit margin.

Third-party providers are increasingly raising the commission fees, making the collaboration less profitable, especially for established brands.

For example, third-party platforms, such as Uber Eats, increased their commission rates to numbers ranging between 15-30%.

This means that in order to be present on a platform like this, the company needs to take into consideration either increasing prices for the end customer or decreasing other costs, in order to generate profit. 

Having a D2C platform, allows for full control over the profit margin. With an independent platform, the brand can decide on its prices, discounts, and costs. Without the obligation of paying a very high commission rate to the platform, the prices can be more affordable for the end customer. 

Control of customer data 

Another advantage of having a D2C platform is having customer data reports. Having your own platform allows you to get a complete picture of the statistics, as well as client behavior and spending habits.

Some third-party providers charge extra for marketing reports, or simply keep the client information to themselves. Having your own delivery application allows you to see how visitors spend their time on your page, which products they prefer, and what time of day is most profitable.

Accessibility 

Another significant advantage of having a direct platform is the ability to communicate instantly.

Customers prefer ordering directly since they know their point of contact will be an expert on the product, and they won't be diverted to the retail platform's general customer support.

Aside from the knowledge, the points of contact on a direct platform, which includes a direct email and phone number, are usually more rapid and personal.

Customers like the assurance that they will receive a prompt response and that the professional who will be in contact with them is well-versed in their specific situation.

What tools are necessary for starting a D2C platform? 

Perfect software provider 

The number one step when starting out a D2C platform is a software provider that is going to be competitive with the main wholesalers, and have the same quality of service, as well as usability of the ordering application.

For example, when ordering food from a direct platform of a restaurant, the customer wants to be sure that they can track their order in real-time and be able to make changes to their basket, and have many menu options, the same way they would on a platform, like Uber Eats. 

Customization 

When choosing a software provider, make sure that their interface is seamless and easily customizable.

You want your platforms to fully visually represent your brand and create a unique experience for your customer, that is going to be differentiable from a third-party platform. For example, you want to include menu options, photos, games, or videos that a regular, large-scale retailer would not be able to do.

This unique and full experience of your brand is going to draw the customer in and create a point of differentiation between your personal service and a large-scale online retailer.  

Order management system 

Of course, the visual aspects are crucial, but practicality and precision are as necessary in order to provide your customers with a competitive experience.

When selecting a software provider, for example, make sure that their platform includes a well-functioning order management system that allows you to keep track of all pending, completed, and returned orders.

This technology will provide you with more control and minimize the number of faults to a bare minimum, resulting in a service that is both dependable and trustworthy for your direct clients.

If you are not sure where to start, look into a platform like Ordering, which is able to set up your website and application in less than a week.

Their team of experts has a very personal and case-oriented approach and will accommodate any requirement that your company may have before launching a D2C platform.