When it comes to selling online, we all know that Amazon and Walmart are the biggest marketplaces where we have to have our presence. But when it comes to DTC (Direct-to-Customer) selling, we often have some questions.
It is enough to become a seller on Amazon to have products on demand, set up an account, and start your journey. You have many tools to advertise your products, and with Amazon FBA, you don’t have to worry about shipping and customer service. Similar to Amazon is Walmart, and you will have your products, and both Amazon and Walmart will have their customer base, leading to more conversions.
What is DTC?
DTC or Direct-to-Customer service stands for manufacturers and brands selling their products directly to customers, avoiding retailers or so-called middlemen.
Merchant service providers such as Shopify are easy solutions for retailers to launch their own online stores, reach customers, and drive brand awareness.
The brands and manufacturers are reaching out to customers and trying to build a good relationship with them. Selling on marketplaces like Amazon or Walmart has some advantages and disadvantages. Also, Shopify, a more DTC service, has a piece of the cake in online selling.
DTC/Shopify Advantages and Disadvantages
Shopify offers you an online presence and your shop to sell to customers. It is more DTC approach than Walmart or Amazon.
There are some advantages to taking this approach directly to customers:
Awareness of your brand or store – This way, your customers will be aware of your brand, and you won’t be just one more seller on the marketplace
Building a good relationship with the customers – Customers will see the brand selling the merchandise and have a more personal connection to the store.
Lack of competition – The customers will see your brand and your products and won’t be able to compare with hundreds of similar or similar products.
Of course, there are some disadvantages as well:
The price is usually higher – Compared to Amazon, the price of DTC sellers is higher for the same products.
Shipping is slower – Amazon FBA offers swift shipping within two days, which is impossible for sellers.
Shipping cost – Amazon usually offers free shipping, which is also impossible for DTC sellers. Even considering the cheapest option will make your price more significant than the Amazon prices.
Marketplace – Advantages and Disadvantages
According to the statistics, marketplaces offer better prices to consumers for identical products sold on a brand’s DTC store and marketplaces more than half the time. When you look at the final sale price, which includes the cost of the cheapest possible shipping option, 59% of the Shopify stores have worse prices for identical products than Amazon, and 58% have worse prices than Walmart.
Amazon and Walmart have many advantages. You can set up an account very fast and start selling your products. You have options for promotion and advertising. With Amazon FBA and Walmart Fulfillment Services, you don’t need to take care of shipping. Also, customer support returns and complaints are taken care of. Walmart and Amazon are more suitable for brands that lack logistic support.
O the other hand, marketplaces like Walmart and Amazon are very competitive. Many sellers are present, and you must consider your prices well and your marketing strategy. The customers will see your products, but you will be one more seller o Amazon or Walmart. A more direct approach to the customer is almost impossible. Competitors may outrank you, and the marketplace provider itself may be a competitor, as Amazon is with its own branded products.
Deciding Where to Sell?
Most sellers have different experiences when choosing where to sell, and it depends on someone’s preferences and their ultimate goal.
Amazon and Walmart are your target marketplace if you have products alone and do not have the budget for logistic support. You need to do your research and decide what is best for you.
However, a Shopify store may be the right solution if you want to sell directly to customers and make awareness of your brand. For retailers wanting to cultivate strong customer loyalty and engagement, selling in a marketplace may have limitations.
Whatever your decision is, you should also consider that you do not have to restrict yourself to a marketplace or Shopify, and you can be present everywhere. Of course, this will require a lot of effort, time, and patience, but it can be done in the long run.
We hope this insight helped you decide and make your business profitable. This is the ultimate goal of any seller.