Advantages of going direct-to-consumer on amazon
For many sellers, their business involves various parties. These can be vendors, manufacturers, or shipping services to name a few. But what about business owners who run every aspect of their business? When owners sell their products directly to consumers and do not use any third parties it is known as direct-to-consumer or DTC business. This means the manufacturer of a company’s products would also be in charge of marketing, distribution, and customer service. With DTC business, owners sell their products exclusively in their own physical shop or website. But many DTC business owners are adding to their sales channels by selling on Amazon. Here we’re breaking down the advantages of going direct-to-consumer on Amazon, and how it can benefit your business.
how does it work?
If you are a direct-to-consumer business and want to begin selling on Amazon, the process is simple. All you need is a Seller Central account and to create an Amazon storefront. Sellers will have the option to choose between a personal account or professional account; the professional account is recommended for DTC businesses. Sellers who meet the requirements can then upgrade their accounts to Prime Seller status after three months. For shipping, DTC sellers have the option to run their own shipping operation and can still maintain a Prime account by using Seller Fulfilled Prime. Business owners can also opt to use Fulfillment by Amazon and let Amazon package and ship their orders.
lower costs
One major benefit of going direct-to-consumer on Amazon is the lower costs. Businesses can save money on finances like customer acquisition and advertising by selling on the Amazon platform. Customer acquisition is easier on Amazon because when customers search for products on the platform, they are already intending to buy the product. Thus, it is a lot easier for those clicks to turn into conversions. When DTC brands are selling on their own websites, customers may find their site or advertisement on search engines like Google. But here, there is a lower chance for conversion, and the seller will have to do more (and pay more) to convert these browsers into customers.
Sellers on Amazon will also gain a lot of organic traffic simply due to how popular the eCommerce giant is. This will allow sellers to gain new customers at no cost, making advertising cheaper. Sellers can increase their organic traffic by receiving high customer ratings.
customer reach
One reason why it is advantageous for DTC business owners to sell on Amazon is because of the customer reach the platform allows for. Amazon is a widely successful platform, and for many consumers, it is the first site they will go to online to buy any kind of product. According to Statista, in May 2022, Amazon had a whopping 2.4 billion combined desktop and mobile visits.
Amazon has also replaced Google as the most-used search engine for product searches. This means that now, consumers will turn to Amazon first when looking to find a product. With this kind of reach, DTC sellers would be exposed to a much larger market than would be possible if they only sold their products exclusively on their own websites.
reputation & awareness
Moving your direct-to-consumer business to Amazon will help improve your company’s reputation. Amazon selling comes with the famous five-star review system, which customers pay attention to. In a survey done on US Amazon shoppers, 55% stated that they at least somewhat trust Amazon reviews. By selling on Amazon, business owners will have the opportunity to gain positive reviews and spread awareness of their brand. Many consumers may not know about your brand if it is direct-to-consumer. Amazon provides a platform where sellers can create buzz around their brands and attract customers through product ratings and reviews. And if you can get high ratings and reviews on Amazon, that will increase customer loyalty to your brand. Having high product rankings on Amazon can also help support your sales in brick-and-mortar shops as many shoppers will turn to Amazon to see reviews of a product before buying it in person. To learn more about the importance of high Amazon reviews and how to achieve them, check out our blog here.
Additionally, selling on Amazon makes it easier for shoppers to find your brand. This is because Amazon product pages are all searchable through the Amazon search bar. Whereas if a customer cannot remember a brand or product name, finding it on Google will be more difficult. On Amazon, customers will also have their order history to reference if they ever want to re-order from your brand.
increase in profit potential
Selling on Amazon can increase a business’s profit potential for many reasons. Firstly, as we previously mentioned, selling on Amazon means having access to a much larger market. If your business is on Amazon, you will also be able to take advantage of large sales on the platform like Prime Day, which draws in tons of customers. Being on Amazon also means gaining access to many useful features and services that could help your business such as Prime shipping and Fulfillment by Amazon. Prime shipping is one of the main appeals of the Amazon platform, and thus customers will be more likely to purchase your product if you offer Prime.
combat fraudulent sellers
Finally, for DTC brands, if they are not already using Amazon to sell their products, third-party sellers are likely doing so. By creating an Amazon storefront and product listings for your DTC brand, you can provide an official source of your products for consumers looking for them on Amazon. This will help draw business away from third-party sellers who are selling your products and misrepresenting your brand. If on Amazon, sellers can also report these fraudulent listings and have them taken down.
To wrap it all up, there are many advantages for direct-to-consumer brands to begin selling on Amazon. The eCommerce conglomerate has completely changed the face of online business. As a DTC seller, you can utilize Amazon’s success and turn that into your own success for your business. Try taking your direct-to-consumer business to Amazon today and see what it can do for you. Happy selling!