What Is The Meaning of D2C E-Commerce?

Definition of D2C e-commerce

D2C e-commerce is when manufacturers/producers sell their products online directly to end-consumers.

What is the difference between D2C business model and a traditional retailer business model?

D2C e-commerce is a type of digital business model where the manufacturer and/or producer sells products or produce directly to consumers from their web store (i.e. business to consumer).

A more traditional retailer business model goes from the manufacturer and/or producer 👉 to a wholesaler 👉 to a distributor 👉 to retailers 👉 and then finally to a consumer.

The D2C e-commerce model — and e-commerce built for D2C — quite literally “cuts out” the middleman.

The traditional retailer business model deals with bulk purchases, so for a manufacturer to start selling direct-to-consumer they’d have to start selling individual items and build up their consumer brand. This essentially is why most manufacturers have not yet switched to a D2C strategy, as their entire business revolves around selling products in bulk.

Looking for more than just a definition? Check out the full blog guide on direct-to-consumer sales in e-commerce.

What are the benefits of D2C e-commerce?

An omnichannel experience

Research has also shown that 55% of consumers prefer to shop directly with the brand manufacturer over retailers. A huge benefit of having a D2C e-commerce strategy is that manufacturers get full control of all their activities, from packaging to marketing. Meaning they can also create an omnichannel experience for their end consumers.

An omnichannel approach in B2B e-commerce is essential for selling in 2023 because buyer journeys are no longer linear and buyer needs have changed drastically in the past few years.

More control over brand reputation

In a traditional retailer business model, a manufacturer has little control when their products are being sold by retailers. A D2C e-commerce strategy gives a manufacturer back the control over its marketing efforts and sales strategies, and it puts the company directly in contact with the end-consumer.

Selling direct to consumer gives manufacturers total control over their customers’ experience from the research phase to purchase.

Truly understanding your customers

Manufacturers who have a traditional retailer business model rarely interact with the consumers who have purchased their products. So, they don’t have many opportunities to get to know their end-consumers, other than by conducting target market research to try to gain a better understanding of their likes and dislikes. Selling directly to end users gives more insights into customer data and therefore more information that can be used with which to improve the customer experience.

Learn more about the benefits of D2C e-commerce.

What are the challenges of D2C e-commerce?

Competing with retailers

With a D2C e-commerce strategy, the biggest challenge for manufacturers is having to compete with retailers. Retailers already have experience in selling to consumers and a good understanding of their clients and the retail market.

Order fulfillment

Newly formed D2C brands often struggle with order fulfillment. Not only does a manufacturer have to ship their products, but they also need to compete with Amazon and many other online retailers with next-day shipping.

Marketing, sales and customer service

D2C e-commerce also means that manufacturers need to start looking after their marketing strategies and sales strategies. This often requires hiring a new team or reallocating resources to develop new strategies (like retail models) and reach new markets.

What does the future of D2C e-commerce look like?

D2C is the future. Especially if there is continual disruption happening across supply chains. More manufacturers will turn to D2C and online stores to sell to end-consumers directly.

Read full blog guide on D2C e-commerce

See all e-commerce terms