How Does Selling on Amazon Compare to Direct-to-Consumer Marketing?

Last Updated September 10, 2020

Are You Ready to Break Your Amazon Habit? 

Amazon has been crowned a revolutionary platform for many small to medium-sized businesses and online retailers looking to increase the visibility of their products. This eCommerce marketplace has attracted sellers with its wide-ranging reach and reputation. However, sellers on Amazon make sacrifices to sell through this behemoth. 

Hey Arnold talking about sacrifice

Selling your products directly to the consumer (some say DTC sales, others say D2C—potato, po-tah-to 🥔) gives you more control over distribution of your products. 

So what does it mean to sell on Amazon?

Sellers get a choice between two plans: Professional and individual. Both plans have a subscription fee and a selling fee for each item that sells through Amazon. As a seller, you get to decide what service to use to dispatch the items. There’s also another option (not-so-secret option C), the FBA aka Fulfillment by Amazon. And, you guessed it, it comes with a fulfillment fee attached. 

Money on fire

Don’t get us wrong. FBA has a ton of perks. Picking, packing, shipping, and handling. This comes in super handy when you’re dealing with returns (or more accurately when you don't want to deal with returns, so Amazon takes care of the hassle). 

Overall, sellers use Amazon to boost sales because they believe it’s a good solution to one or more of their pain points, whether that be inventory management or audience reach. 

What’s the Big Difference Anyway?

At some point, you probably thought about Amazon and worried that you might be losing money by not showcasing your hard work in the marketplace. After all, your target market is definitely lurking there looking for exactly what you’re dealing in right now. Let’s take a look at some of the positive and negative points of marketplace selling vs. direct-to-consumer transactions.

Pros and Cons of Selling on Amazon

Pros Cons
  • It can be much easier to get started on Amazon than to hire a team for your new eCommerce venture. 
  • It’s great for businesses that have an exclusive and/or unique product.
  • It has tremendous reach, something most small businesses can only achieve after quite some time on their own.
  • Thousands of vendors sell the same product as you.
  • You can't retarget your own customers. 
  • You don't get to build a relationship with customers.
  • Even if you use FBA you have to resolve issues with customers.
  • If you're not constantly monitoring for perfect management and zero infringement of policies, Amazon will have no trouble pulling the plug on your account. 

 

Pros and Cons of Selling D2C

Pros Cons
  • You get to build your own brand and reap the loyalty that comes with customer relations. 
  • You get to be more flexible with distribution and experiment with that model in order to maximize profits.
  • You are in control of your business model. (This is a huge pro!)
  • You get to market your eCommerce brand uniquely and set it apart from the rest.
  • It takes a while to establish an eCommerce setup and break even.
  • You cannot immediately access the global reach that Amazon offers.


Excited face

Don’t Give Up on D2C!

While you shouldn’t completely demolish your listing on Amazon after reading this post (unless you find it isn’t making a big difference in your revenue), you should consider making a switch to direct-to-consumer sales.

📈 We grew luxury eCommerce brands despite a global pandemic. Here's how we did it. →

Diverting resources from Amazon to set up a D2C model will help you take steps toward full control over your sales. You get to work on building a competitive edge on your own terms, and as you grow your business you are also growing a brand. 

Here are some tips on how to do D2C right:

  • Build your own website. Start simple with a page that showcases your products.
  • Advertise through social media.
  • Market through online influencers.
  • Consider developing a subscription-based model to track and engage your consumers.
  • Outsource certain tasks to specialists and freelancers who know their stuff.
Going D2C is imperative whether you decide to list on Amazon or not. It helps you learn about what works best for your product and your brand.

Are you a loyal Amazon seller or are you ready to break up with the marketplace and go solo like Beyonce?

Beyonce

Jump on a call with one of our growth experts. We'll talk about your goals and create a strategy to get results. 

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