Marketplaces and Direct to Consumer are MFEO
It's a match made in heaven, a partnership for the ages - Marketplaces and DTC are Made for Each Other.
Both have their strengths...
- Marketplaces are efficient shopper acquisition channels
- DTC offers greater profitability and the chance to build lasting customer relationships
The big marketplaces, especially Amazon, Walmart, and Instacart have the traffic. These sites get over 4 BILLION visitors per month. This makes them a great place to drive trial on your brand or on your new item.
From a financial standpoint, they are great “acquisition channels” and CPA (cost per acquisition) on new shopper trial will usually be well below $10.
The DOWNSIDE, though, is the other non-marketing costs that put downward pressure on your profitability - in particular retailer margin (on 1st party sales) or marketplace & fulfillment fees (on 3rd party sales).
Your Direct-to-Consumer website is a mirror image of this. CPA, especially on a new store, is high - often 3-5X what you’ll get on marketplaces. This can improve over time as you optimize your site, your SEO, and your marketing but in most cases, acquisition will still be relatively expensive.
The GOOD NEWS is you avoid paying the retailer fees or margin so your profit per sale can be much higher if you have an efficient way to fulfill.
So...let's get them together
Find your shopper on the marketplace and move them over time to your site where you can own and build loyalty over time:
How? Here are just a few of the ways that we’re using with our clients…
- Use on-pack calls to action and QR codes to drive website visits
- Target marketplace “in market” shoppers (or purchasers) and send them to your site - Amazon DSP makes this easy
- Follow up your customer service interactions with thank you offers redeemable on site