D2C Business Model: The Ultimate Guide for Going Direct-to-Consumer

People are congregating online more than ever before. The pandemic encouraged many more consumers to make the switch to making purchases online, and a lot of those new e-commerce buying patterns are here to stay. 

As a result, businesses across industries continue to adopt a business model that gets their products and services in front of their ideal customers online – namely, the direct-to-consumer (D2C) business model.  In fact, many companies are now able to exist as digital-only D2C brands because of the robust growth in global e-commerce sales.

In this post, we’re going to talk about the importance of the D2C business model, how your business can take advantage of it in 3 key steps, and the role that digital video should play in your go-to-market strategy!

Table of Contents

• What is a D2C Business Model?
• 3 Steps to Implementing a D2C Business Model
• The Value of D2C Live Streaming
• The Future of D2C Enterprises
• Make Maestro Your Online D2C Hub

What is a D2C Business Model?

The direct-to-consumer (D2C) business model is one in which a brand can sell directly to its end customers instead of through middlemen like third-party retailers or marketplaces.

The rise of e-commerce has made it possible for companies of all sizes to reach their customers without the need for any intermediary. D2C can apply to both physical and digital sales. 

For example, Apple adopted a D2C business model in 2001 when it started opening retail stores in large metro areas worldwide while continuing to make sales through its website. These efforts were layered onto their existing retail business model that involved distributing its products through third-party brick-and-mortar retailers and online retailers like Amazon.

By and large, the majority of growth in D2C is happening with e-commerce. Thanks to the lower fixed costs of a digital approach, brands can scale with D2C online. 

The Benefits of a Direct-to-Consumer Model 

There are a number of benefits associated with D2C for your enterprise. Here are a few of the biggest ones to keep in mind:

• Greater control over your brand: As a D2C brand, you own every stage of the customer journey, including the purchase and nurturing post-purchase. This gives you a lot more control over the brand experience. 
• Direct customer relationship management and data: By controlling the point of sale, you can collect and control first-party data on all of your buyers, which gives you valuable insight into your customer base. In addition, you have the ability to follow up and sell to your customers directly. 
• Higher profit margins: When you cut out the middleman, you’re able to operate with higher margins and keep more of each sale.

Overall, the big benefit to a D2C model is that you own and control all aspects of the buyer’s journey, giving you more autonomy and levers to grow your business. 

The Challenges of D2C

The D2C business model also presents some challenges that businesses should be aware of, including: 

• Scalability of logistics and fulfillment: Without a third-party retailer to handle distribution for you, your business is ultimately responsible for order fulfillment (whether physical or digital products). This includes packing, shipping, and returns – if not in-house, then through a 3PL provider.
• Greater dependence on marketing: Without retail shelf space to rely on for visibility, you need to market your business aggressively and continuously to make your audience aware of your brand and products. 
• Customer acquisition costs: There are costs associated with acquiring customers online through methods like digital advertising, SEO, and content marketing. As more businesses turn to the D2C business model, you’ll have to work harder to contain customer acquisition costs (or boost the lifetime value of every customer).

The flip side of a D2C business model is the complexity that comes with needing to manage everything yourself. From marketing to fulfillment, you’re ultimately responsible for every system in the business. 

It can be challenging from a resource or experience standpoint to handle everything, which is why providers like Maestro are valuable in getting your business up and running online fast.

Ready to build your direct-to-customer business online? Let’s talk through how it’s done!

3 Steps to Implementing a D2C Business Model

If you’re new to the D2C business model, there are a few steps you need to follow. 

Note that these aren’t one-and-done – instead, they represent a repeatable approach that you’ll need to hone and revisit again and again as your business grows.

1. Get to Know Your Audience

If you already have something to sell, then the first thing you need to do is figure out who wants to buy it. 

Assuming your business is like most brands, then you probably have at least a few different customer segments for your product(s). That’s why it’s crucial that you start with market research. Get to know the demographics of your potential customers, including their age, gender, locations, incomes, and buying patterns.

Ultimately, you’ll want a customer persona for each of your most important buyers so you can tailor your marketing strategies and evolve your product offerings to meet those buyers’ needs and preferences.

2. Build Your Brand’s Online Presence

A true D2C business has an online hub for the brand. Typically, this takes the form of a website or online store – and ideally, both in the same place.

Why is an online presence important? Well, a website that you control allows you to set the narrative about your brand and own the point of sale. No matter which vertical you’re in, having an online hub gives you a centralized place to convert incoming visitors and leads into customers and turn one-time buyers into repeat customers. 

If you don’t have an in-house dev team, don't worry. Maestro provides a WYSIWYG website builder that allows you to establish a custom-branded online presence in just a few clicks!

3. Market to Consumers to Generate Sales

There are many ways to reach customers online and generate sales. 

For example, influencer marketing can help you raise awareness of your brand with specific audience segments. Email marketing is a great way to stay in touch with new and existing customers. Paid advertising is another way to get in front of new audiences and retarget potential buyers.

But if you really want to generate brand loyalty with customers, you’re going to want to implement a content marketing strategy that represents your brand well and provides value to your audience. Content marketing covers everything from blog posts and social media to video content and streaming.

Fortunately, Maestro makes it easy to publish videos on-demand, as well as live streaming for everything from product launches to webinars to interviews. 

The Value of D2C Live Streaming

An article about going direct-to-consumer wouldn’t be complete without talking about D2C video and live streaming. Nowadays, what’s more D2C than live streaming content to an audience of customers and prospects consuming your messaging in real-time?

While D2C e-commerce is primarily about selling on your own site versus using a third-party site like Amazon or Etsy, it’s also about the ability to market directly to your audience. Live streaming makes it possible to engage with customers like never before, which is why we recommend building out a strategy for live streaming. 

It’s a truly essential part of any modern D2C business model.

The Future of D2C Enterprises

We hope this article has given you some valuable information on the D2C business model for e-commerce brands.

While there’s plenty of growth occurring in D2C, it’s important to recognize that this business model and the retail route aren’t mutually exclusive. As mentioned in our Apple example, many legacy brands maintain both a traditional retail and D2C business model.

But there are many advantages to going D2C, from getting to know your customers to controlling your brand. As total e-commerce sales continue to climb, the future is bright for direct-to-consumer enterprises.

Make Maestro Your Online D2C Hub

If you’re new to Maestro, our platform offers an end-to-end video CMS for hosting, monetizing, and delivering your streaming experiences. Plus, with our drag-and-drop website builder, you can set up a professional-looking streaming website with a few clicks. Choose your branding, add monetization, and go live in just minutes.

It’s our mission to provide affordable, scalable online solutions for D2C e-commerce brands. We hope you give Maestro a try!

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