4 Benefits of Direct-to-Customer Business Model

3 min readMar 9, 2022

Shark Tank India, an adaptation of the original show, has successfully drawn the audience’s attention and has become a trend since its debut in India.

Ghazal Alagh, one of the Sharks, was a guest on my podcast along with Varun Alagh, and we discussed Mamaearth. This company aims to relieve parenting stress by combining safe, natural ingredients. Ghazal and Varun’s story of reaching the top is nothing short of exciting and adventurous.

When discussing how Mamaearth stands out in today’s highly competitive market, we discussed the D2C model or the Direct to customer business model.

Here are my takeaways:

What is a D2C Business Model?

Direct-to-consumer (D2C) marketing allows marketers to provide products directly to consumers, resulting in a better customer experience. Direct-to-consumer brands work directly with consumers rather than using wholesalers or retailers.

Many countries, including the US, China, Japan, and India, are embracing direct-to-consumer models. D2C brands initially sell their products through their channels, such as e-commerce platforms, retail stores, and social media. Gradually, they build physical outlets to increase brand awareness and customer engagement through online sales.

The Benefits of Selling D2C.

Let’s examine how directly selling to consumers can benefit both consumers and manufacturers.

1. Increase revenue

Direct-to-consumer sellers can offer fair prices because they avoid the costs associated with packaging, shipping, and retailers’ commissions. Affordable products attract more customers to an eCommerce store, as does the number of repeat customers. Brands can increase their revenues and profit margins by increasing the number of users visiting eCommerce websites.

2. Better relationship with customers

It’s no secret that if you want to attract and retain customers, you need to build and maintain good relations with them.
You can build and maintain that relationship by communicating directly with your customers through every point of contact during their buyer’s journey. When you sell your products through intermediaries, it isn’t easy to foster these relationships.
As a result of relying solely on intermediaries to sell your products, you miss out on valuable marketing data.
To better understand your customers, you can also launch surveys, session recordings, heat maps, and even A/B tests if you sell your products on your website. Lastly, cross-selling and upselling can help you increase revenue.

3. Boost customer engagement

When businesses deal directly with end-users, they can gain valuable insights into how customers interact with their products across multiple channels. D2C brands can improve their conversion rates and customer retention rates by offering personalized products. Businesses can better understand their customers’ needs and deliver their products through direct interaction.

4. Omnichannel commerce

Omnichannel commerce refers to a multichannel approach to sales that provides a unified customer experience across all retail channels.
A unified customer experience requires access to each touchpoint in the sales process during which your customers interact with your brand. Traditional sales models make it difficult, if not impossible, for manufacturers to gain full access to every touchpoint with their brand.
By creating a wall between the consumer and the manufacturer, the traditional retail model limits its flexibility and makes it difficult for the consumer to interact with the manufacturer naturally. But a D2C business model allows manufacturers to introduce omnichannel shopping channels, enhance customer touchpoints (online and offline), analyze shopping trends, collect direct feedback, and offer tailored products to end customers.

Businesses that intend to survive in the competitive ecosystem must transition from B2B manufacturers to D2C business models. A D2C business model also enables enterprises to build personal connections with customers, offer customized and innovative products, and build profitable revenue streams.

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