Tips for Overcoming D2C Market Challenges

3 tips for DIY/D2C eComm in November, from an actual merchant: *Tools linked in comments 1. Early inventory planning (likely a bit late if not manufacturing in-house, but still relevant): Not having enough stock or worse, the wrong kind of stock, can be a killer. Pay attention to recent best-sellers. This will reduce overstock and capture the greatest number of sales. Pick 3-5 top sellers and highlight them on your homepage with prominent placement. Don’t stop trying to spread order volume across offerings, but do focus on top sellers during early stages of the holidays. 2. Start your holiday season in October (still a couple days left!): Not talking discounts or sales… not yet. Just conditioning. Start teasing holiday product and promotions now. Consider tweaking your generic list signup to something like a “Holiday VIP list”. Give them access to something exclusive. Early drops, an extra 5%, a free gift — something of real value. Keep this list separate from others. Focus on it for the next two months in parallel with the usual holiday marketing for less focused segments. 3. Retargeting (this one’s huge for young, cash-poor brands): This depends somewhat on your vertical but is roughly applicable to all… Unless gross margin is in excess of 50% and your average order value is over $500 with decent volume (in the neighborhood of $250k+ gross) you should NOT be spending more than $500/month on PPC, depending on overhead. The above assumes you’re running PPC campaigns in-house. If an agency is doing any of the above for you, outside of this rule, you’re tossing money in the garbage. Not only on the managed service but also the ad spend. Instead, focus on in-house retargeting campaigns (much easier these days with an assist from Ai) and get your cold traffic from elsewhere. Example: A client of mine sponsors an influential podcast in their niche. It’s a newer brand so we are seeing a lot of first-time visitors— mostly direct visits where users either type in the exact url or search for the brand name. This is very cheap traffic — on the order of .15 per new visitor (as best we can tell, being direct). What do we do with this valuable set of “warm” leads? Retarget/remarket to them via display ads. What is retargeting? Basically, when someone visits our site (often in consideration), we drop a cookie in the browser. We then set up a retargeting display campaign via AdRoll, leveraging their Ai to quickly generate creative for all potential ad sizes. We then target our highest-converting geographic areas and demos. Over time, we then refine by disallowing the lower converting properties, ultimately refining the campaign to our top 5-10 referrers. Funnels are helpful here, I just don’t see many clients valuing this yet. It’s a shame but also a reality in the era of the DIY eCommerce merchant. Next year? TLDR: start holiday seeding now, focus on best sellers and be thrifty with your spend. 👊 #shopify #ecommerce #bfcm #d2c

A singular focus on digital DTC was great early on, but it almost ended up putting us out of business. Expanding distribution channels allowed us to achieve scale, leverage and profitability, but it was only possible by investing in Brand. So you can get the buy-in to build the Brand that fuels successful channel expansion, here are: 1) Three things learned about shortcomings of DTC-only, and Brand building's essential role in successful retail expansion, 2) Three ways you can update your thinking on the topic, and 3) Three things you can do about this today Let's do it ** Three things learned about shortcomings of DTC-only, and Brand building's essential role in successful retail expansion ** 1. The total market potential for DTC branded e-commerce is inherently limited – on average, about 5 to 7% of your business’s total market potential (e-com is 16% of retail. 66% of e-com is owned by big retailers) 2. Yes, this 5 to 7% is the easiest to access. With a creative product, you can spin up a site, run some ads, and boom you’ve got a business. You can grow quickly and to a decent scale. However, because of the scale limitations and the fact that the digital ecosystem is typically governed by paid direct-response promotion, building a highly profitable business on just this 5-7% is difficult 3. When a category buyer takes a look at their market, they're asking: Will this Brand add to the pie? Will it bring an audience and attract more buyers as opposed to simply displacing competitors by competing at the price and offer level? Is there a real Brand here? ** Three ways you can update your thinking on the topic ** 1. With expanding distribution, the critical questions are: Why would retailers want to carry my product? What’s the unique value proposition of my Brand to a retail buyer? How does carrying my brand get that person promoted? 2. While it's great to 'get that email address' and 'own the transaction', it's less great to have your Meta acquisition cost go up 50, 100, or even 200%. Sure, retailers take their cut, but it doesn't 3x 3. While there are downsides to any channel, the potential scale of contribution dollars retail can generate helps power more product innovation and brand building ** Three things you can do about this today ** 1. Take a fresh look at your channel strategy. Does it still align with everything you've learned about your biz and the dynamics of digital-only customer acquisition? 2. Exceptional product IS the Brand. And, whether you like it or not, so are your DR ads, promos, manufactured urgency, and discounts. You're building a lasting impression with all of it. Ask yourself, "Is it the impression I want?" 3. Review the investments you're making to drive growth. Are they building the Brand where the answers to the category buyer's questions are a resounding YES? It wasn’t until we realized this sneaky truth at Chubbies that we really found the path to sustained and systematic profit growth

When I was 24, my brother and I started, scaled, and exited a DTC brand that was generating $600k/mo. Yes we made a ton of money. But yes, we also made a ton of mistakes. If you’re currently trying to scale your DTC brand, this is exactly what I’d tell you. 1. Understand Your Audience: Before selling, we deeply understood who needed our product and why, tailoring our brand’s voice to speak directly to them. 2. Cash Flow is King: Managing our finances was crucial. We started our first brand with $300. We made it a point to always have a pulse on our cash flow. I used to check our cash flow daily every morning. 3. Quality products: Ensuring our product was top-notch was vital. At first we sold a lot of “crappy” products but these business models are not sustainable, and it’ll bite you in the future. 4. “Rome isn't built in one day”: We wanted to get to $400k - $500k/mo as FAST as possible. Why? Not sure tbh but I now realize yes you can go fast, but build well. Good things take time. 5. When their is chaos, stay calm: From one day to the next during c-vid our shipping containers from China increased their cost 5x!!! This put a all around chaos in our day to day, to find where we can be profitable. 6. Legal & Compliance on Shopify: We got a few cease and desist over the early days. Was not worth the headache, your payments get frozen, you spent a bunch on inventory + marketing but no payouts… Just do everything legit. 7. Customer centric: They are the heart of the business, without them you are nothing. Understand their pains, their recommendation and feedback. Y You’ll see how far your brand can go.