DTC or (Direct to consumer)refers to a business bypassing the wholesalers and retailers and selling their product directly to there consumer. There are advantages and disadvantages to this business model but it seems to be more and more popular with the growth of the internet.
One of the main advantages of DTC is that it cuts out the middlemen (wholesalers and retailers), meaning there is less markup on the products. This can lead to more competitive and cheaper prices for the consumer. It can also help businesses to build a closer relationship with their customers creating customer loyalty.
One of the main disadvantages of DTC is that a business has to become it's own retailer. This can be hard to achieve and takes time to establish because businesses need to set up their own sales and distribution channels. Another disadvantage is that businesses can struggle with reaching a large enough audience without the help of middlemen and technology sources to spread the word.
Overall, the DTC model is a growing trend among businesses with most companies experiencing more advantages than disadvantages. With the growth of technology, it is easier than ever for businesses to reach their target market, leading to cheaper prices and better customer service. Although there are some disadvantages to DTC, businesses should weigh the pros and cons of implementing the DTC model in their company.
What are some examples of DTC products?
Examples of DTC products include subscription boxes, streaming services, online stores, and meal delivery services.
How does DTC benefit businesses?
By cutting out the middleman, businesses can save on costs associated with wholesalers and retailers while still reaching their target customers. Additionally, it allows them to have more control over pricing and better customer data insights.
Fun Fact:
"DTC brands have grown from 5% of the US retail market in 2015 to 15% in 2020, with a projected 25% by 2025" (PWC, 2020).