Why More Amazon Sellers are Doubling Efforts on DTC Model

Global eCommerce developers like Amazon, AliExpress, etc., have transformed the way we buy and sell consumer items, offering consumers a convenient way of shopping. But we can't say the same for sellers. Despite the benefits of a huge consumer base and robust logistics chain, these eCommerce outfits offer unfair regulatory violations and competitor practices coupled with lower profit margins, forcing more sellers to explore the DTC model.

The Direct-to-consumer (DTC) model grants sellers benefit such as lower operational cost leading to higher profits margin, more product flexibility, the capacity to offer a better-personalized consumer experience, and many more.

AllValue is a Software-as-a-Service (SaaS) that allows sellers to get the best out of the DTC model with the extensive feature set. So this post would be looking at why more Amazon sellers are exploring the DTC model and what they stand to gain by using AllValue.

DTC Model Market Trends

Unlike most segments (hospitality, tourism, real estate, etc.) that were hit by the global pandemic outbreak, the DTC market has seen significant growth partly due to the surge of online retail and eCommerce in the heat of pandemic.

Projections of the DTC model going forward sees growth up to 19.2% in 2021 as the world gradually returns to the status quo. On the other side of the spectrum, more sellers and brand manufacturers (57%) are making the switch away from big platforms in search of greener pastures in the direct-to-consumer field. And they do this to escape the stranglehold of middlemen and other intermediaries dominating the conventional distribution system, who deprive sellers of better profit margins. Bypassing these bottlenecks enables sellers to offer lower prices to the end-consumer.

Another rising trend backed by necessity is the emergence of omnichannel for DTC brands, which makes perfect sense when you think about it. The highly competitive nature of the eCommerce ecosystem demands that DTC brands adopt omnichannel (online, mobile, and physical stores) with innovative strategies to capture more market share.

Failure to explore this option makes you handicapped against your competitors who adopt them, as data from the fashion industry suggests that at least six in ten people use at least one digital channel during their apparel purchase journey.

Why Many Amazon Sellers Navigating Towards the DTC Model

We have to address the elephant in the room. The fact that more sellers are moving away from Amazon to set up DTC offerings, which considering some of the gains of these large eCommerce platforms, seems like a strange decision.

Well, there are several reasons for this, some of which we mentioned earlier in this article, but we would be exploring some of the crucial ones in detail.

1. Lower cost of operation: High commissions and a plethora of selling fees make the general cost of running an Amazon store high. With a Software-as-a-service based DTC platform, sellers are assured of bypassing these exorbitant commissions and administrative fees while at the same time leveraging on their advanced features that help create a better experience for both buyers and sellers alike.
2. Higher profit margins: With lower operational costs come better profit margins for sellers, which is hard to come by when selling on Amazon. Low margins are further complimented by low sales on Amazon as they practice anti-competitive acts like, offering similar products at lower prices or excessively promoting their own products to the detriment of 3rd party sellers.
3. Product flexibility: Amazon provides sellers with little or no room to be flexible with their product offerings. A seller on Amazon has no power to customize orders, attend to special buyer requests, or even offer special forms of branding to consumers. Utilizing a DTC platform gives sellers the freedom to be flexible and a lot more.
4. Personalized experience: A seller's ability to offer flexible products and services leads to developing a better personalized experience for the end-consumer, all of which Amazon does not support. The experience could be as little as a simple personalized order message or order discount on special occasions like anniversaries, birthdays, etc. Direct-to-consumer platform gives sellers the freedom to offer many of these add-on services.
5. Platform to build a solid consumer base: A combination of all the above-mentioned perks of the DTC model ultimately results in a loyal consumer base, which is crucial to long-term sustainability for brands and sellers. Selling on Amazon with all these restrictions makes it more difficult for a seller to stand out and keeps one in a loop of lower profit margins and higher operational costs.

The multiple constraints associated with selling on Amazon are causing a paradigm shift that is tilting towards Direct-to-consumer platforms. Although, sellers can maneuver these constraints by adopting a SaaS DTC platform like AllValue, which has been proven to provide sellers with a cheaper than you can imagine alternative to launching their eCommerce business.

But we should be quick to note that it is not enough to explore these platforms alone. Sellers must ensure that they leverage a strategic omnichannel system to get the best possible reach.

AllValue is a top-of-the-line online store builder that delivers high-end eCommerce services for both small and big businesses. In addition, AllValue offers some of the lowest prices out there, making it easy for just about any business to make it to market in no time. If you want to experience more, get a feel of AllValue's offerings for free with their 30-day free trial today!