Take Full Control of Your Brand with DTC: A Guide to Selling Direct to the Consumer

Do you want full control over your brand from the first time your potential customers encounter it until they are holding your product in their hands? Do you want to cut out costly middlemen such as wholesalers, retailers and third-party resellers?

And do you want plenty of customer data, so you continuously get feedback that can develop your product, your brand and the overall customer experience? Then DTC (Direct to Consumer) may be the right way forward for your company.

In this article we give our best advice on how to get off to a good and safe start with DTC, which challenges you will (probably) run into, and how to secure your brand’s success now and many years into the future.

Among other things, you will learn:

✅ What DTC sales are, and how they work.
✅ What the 5 biggest advantages and disadvantages of DTC are.
✅ Which 5 pitfalls you should avoid when starting out with DTC.
✅ Why digital integration is the key to successful DTC in 2024.
✅ Which eCommerce platform suits YOUR brand specifically.
✅ How to get started with DTC step by step with an 18-point checklist.

All of it in a simple, concrete and manageable way.

Let’s dig in!

What is DTC and how does it work?

If your company sells your products directly to the consumer without middlemen, then that is DTC (Direct to Consumer). Typically that means you sell your products from your own eCommerce platform (that is, a webshop).

It also means that you alone are responsible for branding and marketing your products, because you do not have shops or other third-party resellers to help you with that work. Which in return means that you do not lose the profit by letting others sell and market your products for you.

DTC has really always existed (at least as long as people have traded with each other), but in recent years it has seen a resurgence. Because digital solutions help make it easier to get started, simpler to market your brand online and easier to collect usable customer data in large volumes.

“With great power comes great responsibility.”

Uncle Ben (Spider-Man)

You could say that DTC gives you great freedom to create your own brand and get a close relationship with your customers. But it also comes with a great responsibility.

Put briefly, there are 4 important areas in your company that you are responsible for in DTC:

• eCommerce platform: You have to set up a site yourself where you can sell your products and support your customers when they need it.

• Marketing and branding: This is a big one. If you are going to be able to sell your product all on your own, you need to make sure you invest in branding and marketing. For example through SEO, digital advertising, social media and email marketing.

• Sales and delivery: When the customer has bought your product on your eCommerce platform, you have to handle the shipping yourself. That of course requires a warehouse, good logistics and packaging and a (preferably fast) delivery.

• Customer service: If your customers have questions, make complaints or want to return your products, then you have to be ready to handle that part of your business as well.

That may sound a little demanding, but it also gives you the opportunity to:

• Create a personal customer experience
• Build close customer relationships
• And collect important customer data

Now that we are on the subject of advantages and disadvantages, let’s take a closer look at some of the biggest ones when it comes to DTC.

The 5 biggest advantages (and disadvantages) of DTC

We already touched on it a little in the previous section: the advantages of DTC are substantial. But as with anything else that can give a huge bonus, there are also some disadvantages you need to be aware of before you throw yourself into a DTC adventure.

The 5 biggest advantages of DTC:

• Full control over your brand: When you sell directly to the consumer, you control the marketing, branding and sales yourself. That way you can be sure that the customer experience is exactly as it should be from start to finish. You also ensure that your company’s values can shine through all the way.
• Concrete customer data: Because you handle everything yourself, you also get a lot of valuable customer data. That gives you a fantastic feedback loop, so you can continuously adapt the customer experience so it is exactly as it should be. You can also correct or anticipate any errors in your sales or marketing process more quickly.
• Higher profit: Yes, that is quite a big advantage, right? Because you cut out the middleman, you can get a larger profit when you sell directly to the consumer yourself.
• Flexibility: Since you control the entire supply chain yourself, you can adapt more easily to changes in the market or in customers’ buying behaviour. Better small and fast than big and lazy.
• Closer customer relationships: It is easier to be a fan of a brand if all your contact is directly with the brand. That can create greater customer loyalty and ambassadors who help you spread your message for you.

But of course there are also some disadvantages you need to be aware of.

Here are the 5 biggest disadvantages of DTC:

• Logistics. Logistics. Logistics: The responsibility for stock and logistics lies with you. And that can be both very time-consuming and fairly costly. So it helps to be good at planning and to be structured. Here the right ERP system can be a huge help. Check out our guide here: Choose your next ERP

• Higher marketing costs: When you cut out the middleman, you also miss out on the benefit of their marketing on your behalf. Your marketing costs will therefore of course be higher.

• Customer service: Handling complaints, returns and answering customers’ questions directly can be quite a large task, which requires resources that could otherwise have been used elsewhere.

• Start-up capital: Since you have to handle everything yourself, it can cost quite a lot of money to get started, which can be a roadblock for some companies dreaming of getting started with DTC.

• Sharper competition: Direct sales can bring intense competition, since you are in direct competition with other brands online. It requires ongoing optimisation of products, prices and marketing if you want to stand out in the market.

Put briefly, for every advantage there is a disadvantage that follows if you choose to go the DTC route. That is why it is important to analyse your way to what is best for your company.

And here the points above can be a good start.

In addition to advantages and disadvantages, there are also some pitfalls we would like to make you aware of.

The 5 biggest pitfalls as a DTC company

When you start out as a DTC company, there are many things you have to keep track of. That can mean you end up overlooking some important elements that could otherwise help develop your company to new heights.

Here we have gathered 5 of the biggest pitfalls that we see DTC companies typically fall into:

1. Not adapting to digital trends: There is constant technological and digital development, which DTC companies would do well to keep up with. If a competitor suddenly has a (smaller) technological head start, it can be costly. That could for example be new payment methods (e.g. MobilePay) or new social media (e.g. TikTok).
2. Not familiarizing yourself with international rules: If you intend to sell your products abroad, make sure to get well acquainted with the local rules and regulations within e-commerce. That could for example be taxes, duties or rules on consumer protection. And now that we are talking about internationalization, also remember to adapt the language and currency on the eCommerce platform. And make sure your ERP has templates that fit the individual market, so that VAT, for example, is handled correctly.
3. Not having control over customer data: Customer data is extremely valuable, which is why it is very important that you look after it properly. And that you comply with the applicable rules in the area. It can cause a huge dent in customer trust if your customers’ data is suddenly hacked. Or cost expensive fines if you do not comply with, for example, the GDPR rules.
4. Lacking focus on sustainability: Many consumers today are very aware of sustainability. That is why it is important that you think about how your company can minimise your environmental impact. And that applies to your entire supply chain.
5. Forgetting to think in terms of scalability: For some, just getting started can be a big task. But if you do not build scalability in from the start, it can end up costing both money and trust when your products suddenly become a big success. That is why it can be a good idea, for example, to invest in advanced stock and logistics management as well as automated systems for customer service and data analysis from the start

If you have a strategy for how to avoid the 5 pitfalls from the start, then you have given your company the optimal conditions for success. Something else that can help your DTC company get off to a good start and all the way to the finish line is the right digital integration.

So let’s take a closer look at what that is and what it can do for your company.

This is why integrations are the key to successful DTC in 2024

Put briefly, integrations are processes that make it possible for different software systems to communicate and share data with each other. The goal is to create a more coherent and efficient workflow by automating and synchronising data across multiple platforms.

For example, if a company uses a CRM system to manage customer relationships, an eCommerce platform to handle online sales, and an ERP system to manage stock and finances, integrations between these systems would make it possible for data to flow freely between them.

That means that if a customer places an order via the eCommerce platform, the order information will automatically be updated in both the CRM and the ERP systems.

Smart, right?

In that way, digital integrations help to:

• Eliminate manual work
• Reduce errors
• Improve customer service
• Make the company’s processes more efficient.

That is why they are often an important part of the company’s technology strategy. Integrations can be complex and require technical expertise to implement, but there are many tools and services available that can make it easier.

Here is a concrete example:

Dynamics 365 Business Central

An integration of ERP systems could for example be a company using Microsoft’s 365 Business Central.

That has 5 primary advantages:

1. Efficiency: ERP integration can help automate a range of processes, which can reduce manual work, minimise errors and increase efficiency. For example, the ERP system can automatically update stock status when a sale is made on the eCommerce platform.
2. Real-time information: ERP systems provide real-time information about different aspects of the business. That can help you make informed decisions, for example about which products to highlight on the website, based on current stock levels.
3. Centralisation of data: By gathering all data in one place, ERP systems can give a complete and accurate overview of the business. That can be very valuable for reporting, analysis and planning.
4. Customer service: ERP systems can also handle customer service functions, such as tracking orders and handling returns. That can improve the customer experience and help build stronger customer relationships.
5. Scaling: With an ERP system, DTC companies can easily scale their operations up or down, depending on demand. The system can handle a large volume of transactions and data, which is crucial for the company’s growth.

It is important to note, however, that ERP integration can be complex and may require significant investments of time and resources. That is why it is important to weigh the advantages and disadvantages carefully before deciding on that strategy.

If you are interested in getting a DTC integration to Shopify or Magento 2, you can see the price at this link: B2C integration price “Business”

Another way integration can help your DTC company is with a PIM integration.

You can read a little more about that here:

PIM integration

Product Information Management (PIM) systems play an important role in the DTC model. PIM systems are used to manage all the information associated with a product’s life cycle.

In a DTC model, where companies directly handle all aspects of the sale, from production to marketing to delivery, PIM systems become even more important.

Here are 4 ways a PIM integration can benefit your DTC company:

• Centralisation of product data: PIM systems allow the centralisation of all product information in one place. That means you can have a single, consistent source of product data, which can help minimise errors and inconsistencies in product descriptions across different sales channels.

• Efficient product launches: With a PIM system you can quickly and efficiently update and distribute product information when new products are launched. That can save time and resources, especially for companies with a large number of products or frequent product launches.

• Improved customer experience: By ensuring that product information is accurate, consistent and complete, PIM systems can help improve the customer experience. Customers can easily find the information they need to make purchasing decisions, which can lead to higher customer satisfaction and loyalty.

• Multichannel sales: If you sell your products on different channels (e.g. your own website, social media, marketplaces), a PIM system can help ensure consistent product information across all the channels.

As with ERP systems, implementing a PIM system is a significant investment and requires a thorough evaluation of your needs and resources. But it can be an important part of an effective DTC strategy.

As you can see, digital integrations solve many of the big problems that can exist in a DTC company. But something that is just as important is exactly the right eCommerce platform. So here is a short guide with the advantages and disadvantages of the different platforms.

Which eCommerce platform should I choose?

It is clear that the most important thing in your DTC business is to have a good webshop where you can sell your things online. There are many different places you can set up your webshop, and it can be something of a jungle to work out which solution is the best for you.

That is why we will take a look at some of the most popular options, so you get a better overview.

Here is a list of the 5 most popular eCommerce platforms among DTC companies (and the most important advantages and disadvantages):

Shopify:

✅ Very user-friendly, good for beginners, robust security features, offers many integrations and extensions, has good mobile features, and has a built-in payment gateway.

❌ Can become expensive with fees for premium features and extensions, some limitations in customisation, and some criticize it for not being as SEO-friendly as some competitors.

WooCommerce (for WordPress):

✅ Great flexibility and customisation options, many available plugins and themes, SEO-friendly, and it is free to use (although you have to pay for hosting and any premium plugins or themes).

❌ Can be complex for beginners, requires a certain amount of technical knowledge to get the most out of it, and you have to handle hosting and security yourself.

Magento (Adobe Commerce)

✅ Very flexible and scalable, can handle large, complex webshops, and has many available extensions.

❌ Can be complex and technically challenging to use, can be expensive (especially Magento 2 “Commerce”), and may require dedicated hosting to perform well.

BigCommerce:

✅ No transaction fees, good scalability, offers many built-in features, and has strong support for multichannel sales.

❌ Some users find the backend less intuitive than competitors such as Shopify, and certain plans have annual sales limits, after which you have to upgrade to a more expensive plan.

Squarespace:

✅ Focus on beautiful design with many professionally designed themes, intuitive interface, and good integrated features for small to medium-sized webshops.

❌ Less flexible than some other platforms, has fewer integrations and extensions, and some features are lacking for larger webshops.

Each platform has its own niche and is better suited to certain types of companies and situations. It is important to consider your specific needs and resources before you make your decision.

If it all seems a bit overwhelming, we have gathered it all in a checklist for you here.

Here you go

How to get started with DTC (step-by-step checklist with 18 points)

Before you start selling directly to consumers, run through this list to see whether there is anything you have not yet considered

Here is the checklist for DTC companies:

1. Target audience: Understand who your customers are, what they want, and where you can reach them. It is crucial to know your target audience well in order to deliver the products and the service they are looking for.
2. Products: Choose which products you want to sell DTC. Consider whether some products are better suited to that sales strategy than others.
3. Business plan: Make a detailed plan for how you will run your DTC business, including your budget, your marketing strategy, and how you will handle logistics and customer service.
4. eCommerce platform: As described earlier, you have to choose an eCommerce platform that suits your needs. Consider factors such as ease of use, scalability, customisation options, integration options, security and price.
5. Webshop: Design your webshop so that it looks good and is easy for customers to use. Write accurate and well-formulated product descriptions, and make sure there are beautiful images of your products.
6. Integrate with ERP/PIM systems: Integration with ERP and PIM systems can help streamline your business, avoid the pitfalls and ultimately increase your revenue.
7. Logistics: You need a system in place to handle stock management, order processing, delivery and returns.
8. Marketing strategy: You have to reach your target audience where they already are, and show them why they should buy your products in particular. That could for example be through search engine optimisation (SEO), paid advertising (e.g. Google Ads, Facebook Ads), email marketing, social media and influencer marketing.
9. Customer service: You need a system in place to handle customer questions and complaints. For example email support, live chat, phone support and a FAQ section on your website.
10. Launch your DTC business (hooray!): When everything is in place, you are ready to launch your DTC business. It is a good idea to do a soft launch first to test the systems and fix any problems before you go big. Remember that the DTC model requires a significant investment in time, money and resources, so it is important to plan thoroughly and be prepared to handle the challenges that may arise along the way. And even more importantly: remember to celebrate your launch in style.
11. Implement analytics: Install analytics tools (such as Google Analytics) on your site to help you understand your customers’ behaviour, evaluate the effectiveness of your marketing and make data-driven decisions.
12. Loyalty program: Consider setting up a loyalty program to encourage repeat purchases and customer loyalty.
13. Optimise for mobile: Make sure your webshop is optimised for mobile phones. Since many of us shop a lot from our phones
14. Legal: Consider legal factors such as complying with data protection rules, the security of payment transactions and having clear policies for returns and refund requests.
15. Social media strategy: Get a social media strategy, so you can get in organic contact with your target audience and guide them into your webshop that way. Consider which medium is best for your particular target audience.
16. Prepare for growth: Plan how you will scale your business if that becomes necessary. That could for example mean having flexible solutions for stock, delivery and customer service.
17. User feedback: Put a system in place to collect and analyse customer reviews and feedback. That can help you improve your products and your customer service.
18. Sustainability: Consider how your DTC model can contribute to sustainability. Both in terms of product range (e.g. environmentally friendly products) and operations (e.g. environmentally friendly packaging, optimisation of delivery routes to reduce CO2 emissions).

Et voilà! Then your DTC business is ready for success.

Of course the checklist (and this article) does not contain all the answers on how to start, run and succeed with your DTC business. But it is a good start. Also remember that success with DTC often requires a cultural change in your organisation, since it can be very different from traditional B2B models.

That is why it is important that there is full backing from management and that you make sure all employees are on the same page and understand the goals and requirements of a DTC strategy.

Wouldn’t it be nice to see a couple of examples of DTC companies?

Then check out these companies:

• PlusPlus A/S (uses Shopify). Read our case about PlusPlus or see their site here!
• The Headwear Company (uses Magento 2.) Visit their site here

Do you need sparring in connection with digital integrations in your DTC company?

Shall we help you?

Let’s talk about your DTC options.

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