Most brands and retailers realize the importance of having an e-commerce channel. What’s changing is the conversation around selling directly to the consumer versus selling via online marketplaces.DTC sales accounted for 24% of the total e-commerce sales in 2020, valued at $17.7 billion, according to Nuoptima.Both traditional brands and DTC native brands are increasingly relying on their own storefronts, whereas they previously sold on platforms or marketplaces.The big motivations behind moving towards selling direct to the consumer (DTC) is better margins and controlling the customer relationship. Both are solid objectives.“Everybody needs an ‘Amazon plan’. That plan might be to do nothing, but I probably would question that plan and say that's slightly naive,” said John Readman, founder of Ask BOSCO, a predictive marketing solution. He points out that with the growth of online retail, brands need to not only look at selling online, but how to boost the return on investment of those sales.What Many Brands Overlook about Direct SellingSelling direct online means expanding liability risk, cyber risk and more complex supply chains. These risks are normally undertaken by other parties in the supply chain such as wholesalers and retailers. Data privacy and security has become one of the most critical priorities due to the high level of data that businesses are able to extract from individual customers. Then there’s the increased complexity of the supply chain itself, which many brands might find more daunting than they expected.Moving from a model where you sell to a few retailers versus thousands of individual consumers means being able to forecast demand, create bespoke supply chain and delivery processes, as well as handling payments, manage returns and communication with customers. It also requires a shift away from marketing campaigns that are primarily designed to increase brand awareness to those that directly encourage consumers to purchase goods.Marketplaces Might Be Better Than You ThinkMany apparel brands have backed away from Amazon and similar marketplace giants. “Not the right image … a hotbed for counterfeits … we can control the customer relationship … difficult to create a rich brand experience” - all valid reasons, but not necessarily a reason for ruling out marketplaces from your strategy.A better approach might be to see marketplaces as part of your total retail footprint, that could include physical stores, your own online store, and other channels.“We see quite a lot of brands in Europe that have created a brand just to sell on the marketplaces because they don't want the overhead of building and maintaining a website, having all the warehousing and logistics. They prefer to pay a premium for someone else to do that,” said Mr. Readman, who's worked with Asos, Sigma Sports, BMW and major brands. Direct Sellers’ DilemmaHaving total control of the customer relationship is great, but first you need to get - and grow - that customer base. Customer acquisition costs (CAC) have increased 60% during the past 6 years due to market saturation as more brands vye for consumers’ attention, according to data from ProfitWell. For brands that have a loyal customer base and are already investing heavily in advertising, getting consumers to their web stores will be easier than for everyone else. The number of people who, for example, buy Nike shoes because they deliberately were searching for them is different from other brands where purchases are less ‘intentional’ and more ‘incidental’. Incidental purchases are when a consumer who is shopping for sports shoes finds a selection of products from different brands and then chooses the pair that they liked best. The Importance of Being Where Your Customers AreMajor platforms have literally millions of potential customers there everyday - who enjoy the convenience of being able to buy a wide range of products on one platform. Amazon, for example, has 200 million Prime members who make Amazon their go-to online store.There’s a disincentive to shop on another platform if what they need - or something similar - is available on Amazon. When you go solo, you need to find ways to first get people to your website. Not easy in a hyper competitive ecommerce world - where most shopping starts with a search on Amazon.Beyond Free ShippingOne of Amazon’s most successful tactics has been free shipping. According to a study by Scalefast, 43% of consumers would choose Amazon over a bespoke DTC, simply because of the cheaper shipping options available.However there’s more to the Amazon experience than that.There’s also ‘discovery’. Customers shopping for one item are automatically shown similar items, but also totally different products that they ‘might also like’. The ability to find just about any product on Amazon is the No. 1 reason consumers shop there, eclipsing in importance even free shipping, according to a survey from Digital Commerce 360/Bizrate Insights.It gives shoppers the best of what used to be the classic department store experience, where walking through the store was like entering Aladdin’s cave with a new treasure around every corner. On Amazon consumers can easily browse through an endless offering of products - and some of that browsing leads to impulse purchases. That drives up sales for Amazon - but also for sellers on the platform.The reasons consumers avoid buying from Amazon include that they prefer to try on or touch products (33 percent), they would rather support local retailers (29 percent) and that they don’t want Amazon to monopolize online shopping (24 percent), according to Digital Commerce 360.Managing Multiple ChannelsFor many brands the most successful ‘Amazon plan’ has been to sell a limited part of their range on Amazon and then sell other items on their own websites or with their retail partners. New or exclusive products could launch in their own stores and later be available on Amazon. Others create separate collections for Amazon, just as they do for outlet malls. The idea is to leverage the vast traffic that Amazon and other big platforms offer, without pirating your brand. One of the key mistakes that many brands make is allowing different prices in different channels for the same product. Likewise, it is important to pay attention to third party sellers who sell your products on marketplaces at other than your list price.E-commerce offers incredible opportunities for brands to grow their sales and enter new markets. However, like all opportunities there are risks and costs, and knowing what they are and planning in advance can help companies make decisions that lead to greater profitability.