Direct-to-consumer (D2C or DTC) eCommerce is unique because it allows brands to sell directly to customers without relying on third-party retailers or marketplaces. This approach offers several distinctive advantages.

Advantages of D2C eCommerce

1. Brand Control:

DTC brands maintain full control over their branding, messaging, customer experience, and pricing, enabling a more personalized and authentic connection with consumers.

2. Data Ownership:

Selling directly allows brands to collect and analyze customer data firsthand, leading to better insights, targeted marketing, and improved product development.

3. Higher Margins:

By eliminating intermediaries, DTC brands often enjoy higher profit margins, as they retain a larger share of the revenue.

4. Agility and Innovation:

DTC companies can quickly test new products, customize offerings, and adapt their strategies based on customer feedback without going through third-party channels.

5. Customer Relationships:

Building direct relationships helps foster loyalty and trust, enabling brands to offer tailored experiences, subscriptions, or exclusive content.

6. E-commerce-First Focus:

Many DTC brands prioritize seamless online experiences, innovative digital marketing, and social media engagement, making eCommerce at the core of their operations.

Overall, D2C eCommerce empowers brands to create a more intimate, flexible, and profitable connection with their customers—something that traditional retail or marketplace models often cannot offer as effectively.

Would you like more detail on any of these points? Get in touch!

The post Is D2C For You? first appeared on SELLTEK.

My Experience with Discounted Marketplace Bidding

Every day I go on some online marketplace where I bid on projects. This is one my marketing activities that complements my reaching out to prospects directly. It is a crazy place - this marketplace, let me tell you. People bid there $500 for a $5,000 dollar project. It makes me think how can I ever get any project with my prices. With hours I will spend, $500 or even $1,000 won't even pay my rent and expenses. So I started to check other design companies and agencies for what they are charging, and to my surprise, they were charging 2 times more than me on average. At this point I started to think about value and what does a $500 provider lack in his offering and that I provide to a client.

Why $500 Offers Fall Short

First, these $500 offers are made by either freelancers whose livelihood doesn't depend on this income and who's commitment to project is generally very low or they are made by companies that are not in US or anywhere in developed world for that matter. The freelancer is thinking "I'll make some money today, it's better than nothing but tomorrow when I get a real job, the client can find somebody else". I hear experts say how we are moving to freelancer economy where companies will be hiring 90% freelancers and only pay for clear deliverables in a worldwide competitive market. How about guarantees of timelines, delivery, and budget? I don't think so. The other $500 group are offshore companies where they can hire at rates where I can't even go. My government won't allow me even though it allows companies from foreign countries. On top, they don't have to pay any tax i US. Great job protecting US worker! Anyhow, back to value. A foreign company may have trouble understanding your work standards. Monday means Monday and that is not Friday. It costs money to check same things over and over and report that it is still not being fixed. Finally, why do we even think that professional education quality in "i won't name anyone" is same as in the US.

The Hidden Costs of Churning Providers

Second, this search for bottom price creates another problem. Unhappy with providers and dealing with uncommitted freelancers, companies cycle through many developers working on same software. Each usually messes it up a bit more while taking shortcuts in order to make some profit and not worrying about the long term. A clear series of hit and run cases. It takes only 2 or 3 and software can be already rendered completely unmaintainable. I had a project once with software like this and after a while I had to recommend to client that it would be better if we bite the bullet and rewrite the software because the time to add or fix anything, due to the state the software is in, is 10x longer than it would be if software was in a normal maintainable shape. She didn't want to hear it, I recommended somebody else, and I don't know how it ended for her and her business but probably not very well.

Why Saving Money Can Backfire Long Term

Saving today can cost you a lot more in the future. In addition there is the whole legal aspect to the digital creations. A US company serving US client is governed by US laws. Most foreign companies bidding on the Internet are not. Copyrights are clean and belong to client when you deal with local providers. There are guarantees in place! Savvy business people know that. They don't want to risk their business for a few dollars of saving when the stakes are usually 100 or 1000 times bigger.

Perhaps the best argument why the rates are as they are is that US companies are in competition with each other. This keeps rates in check. If you're still asking why does someone charge $5000 when another will do it for $500 then you probably still don't understand value of our service. Read it again and God bless you and your business.

The post Price vs. Value first appeared on SELLTEK.

Pricing of products is as much science as it is an art. Generally there are 2 types of products - commodity and more or less unique. Apparel is more unique unless you are selling known brand who's same products you can find at many other retailers. Definition of commodity is that same product is available at many places to buy. I'll try to explain how to set price on each type. In all cases the bottom price is determined by your cost: product, shipping, advertising, ... This can be different from retailer to retailer as they may acquire product at different costs. If you are making the product than your cost is unique and the only one relevant. Then there is also the top price you can set. Top is more complicated and I explain it below. Generally you will set price somewhere between.

Commodity products

With commodity product, like a phone charger made by known brand and sold at numerous places the price you set is determined in addition to your cost also with prices that other retailers sell it at. If same charger costs less on Amazon than in your store, you need a very good reason to keep it that way. What else do you offer to justify this higher price? In most cases you will find it hard to sell at prices that are more than on Amazon. Many who sell on Amazon use dynamic price algorithms to continually adjust price relative to competition. Needles to say this is a very dangerous game that can quickly lead to rock bottom prices on commodity products thus depriving everyone of any good profit margin.

Unique products

With unique products and especially if you manufacture them and control distribution you have more freedom setting the price. However in most cases there will be substitutes to your product so unless you are a top designer you are still bound to some limits. Generally the higher the price the less people will buy. This brings in some interesting math. Do you prefer to sell 20 pieces at $200 each or is 12 pieces at $300 better. If you can't answer this you need to take a math class.

What People Really Buy: Value vs. Price

What most people buy on is value or price. To explain value is best with example. If you can get 6 socks package for $20 it is better value than 3-sock package at $13. But you may not need so many socks so you go for a less valuable package. Retailers play this game all the time to get you spend $20 instead of $13 and each pair of sock probably costs them $1 or less. Here we are already getting in use of pricing as strategy.

Pricing Strategies to Consider

Another strategy is to offer penetration pricing in order to gain market share or drive out competition. Many Chinese companies are accused that they sell below their cost in order to introduce their new products to buyers and when buyers change their image of products and competition is gone the prices are raised. While this is illegal it is hard to prove. After all, products made under certain conditions can cost very little to make. Not saying more.

Therefore, in summary, if you want to find the right price for your product, first determine its cost then research competition and substitutes for top price, and finally experiment with price between the low and top bounds to maximize profit. Hope this gives you some ideas and help. If you'd like more help with this, please reach out for a consultation.

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