As a DTC founder, executive, or operator, the list of stuff you have to do never really ends. 

There are the basics - maintaining inventory, understanding your finances, managing employees/vendors, updating your online store, and responding to customers. 

But there’s all that other stuff that continuously piles on top. Marketing creative, advertising platforms, sales channels, SaaS tools… 

We know, it’s a lot. We’re here to help as much as possible. 

This week we look at:

• The single key to win at Meta ads (there isn’t one, sorry)

• Selling your ecomm data

• How to transition from Amazon to DTC  

There’s no “rule” to media buying

We talk about media buying a lot. Understandably, since it’s such a huge part of DTC. 

But because the algorithm is a black box, the only way to decipher it is through rigorous testing.

Even at Temu-level volume though, you won’t derive an absolute truth. It’s all product, audience, and timing dependent. Oh, and the black box changes all the time. 

So there is a lot of note comparing between media buyers in the DTC space. It isn’t wrong to do so, but it can be risky. 

• First, because you need to ascertain the quality and veracity of someone else’s efforts. Not always clear or easy.

• Next, their product, audience, and market dynamics are almost certainly different from yours so their findings might not apply to you. At all. 

• You need to do your research and be knowledgeable about the space enough to decipher what people are saying. Is someone wrong? Or are there just pros and cons to each method? 

Lastly, you will inevitably go crazy because of the number of contradictions you find (@Rich_Muskett from rightleftagency.com). 

Last week, we covered a big disagreement last week between Andrew Faris and Jess from FireTeam over how to test creatives. 

No one was “wrong” per se. There seem to be pros and cons to each approach. 

As Marcin Szychowswki from WeLucid notes, beware of he/she who speaks in absolutes. 

The bottom line? There is no one rule to rule them all.

Takeaway: You can learn and get ideas from what people share, but you’ll always need to fundamentally understand your customers, your brand, and your market. And then test, test, test. Even if you nail down an ad account or creative angle that works, things could easily change down the road. 

None of this is easy for anyone, let along smaller brands with less money and manpower, but media buying is not beginner-friendly.

Selling eComm data

“I should definitely be doing that” - every DTC operator reading this, probably. 

Here’s what Marshall Morris from HomeLife means by monetizing your digital data:

1. Selling advertising to non-competing brands with audience overlap.

Let’s address this. 

As Danavir Sarria from @supplydropmedia points out, this is what a media company with no products would do. 

• “Advertising a non-competing brand probably drives less profit than selling more of your own product, no?”

• Actually, no, replies Marshall. The cost/margin ratio is so good on selling ads that it can be more profitable. There are exceptions, however, like high LTV and subscription products. It is most definitely a balancing act. 

• There are also a ton of ways to experiment: selling ship insert space, email mentions, social media mentions, etc. Oh, and he finds customers for this via outreach. 

2. Building things for niche audiences that monetize further beyond just transactions - think gaming, coupons, forums, authority blog content, newsletters, etc.

Here, he means using your customer data to create experiences or content that is tailored, ensuring high engagement rates. 

Once achieved, insert ads. 

Takeaway: The key here is to leverage your customer data. We are heading toward a cookieless future, where first and zero-party information is all we have. Learning how to get the most out of it is a good idea. And with costs to acquire customers continuing to increase, new revenue sources with high profit margins are always welcome.

How to transition from Amazon to DTC (and vice versa)

Bryan Porter, co-founder of Simple Modern, recently shared that they have struggled to transition to DTC as an Amazon-native brand. 

However, things turned around last year thanks to one change in strategy. 

They stopped competing with Amazon and Target prices on their DTC channel (their website).

Here’s why that competition didn’t work out. 

• The resulting margins prohibited paid customer acquisition 

• DTC was less profitable than Amazon (mainly due to shipping)

• Their website didn’t add value to returning customers over their other channels

Instead, they realized that DTC has unique strengths they needed to lean into, including bundling, communication, and personalization.

Let’s get into each…

1. Bundling.

Margins on Amazon are low in order to stay competitive on generic search terms. Also, Amazon takes a big cut via referral fees, fulfillment fees, and advertising.

• However, website margins can be much higher, especially if you incentivize higher average order volumes (AOVs). 

• Why? Because if it costs $12 to ship one unit, it might cost $14 to ship multiple. Your cost to ship per part drops as you bundle.

• How to increase AOVs? Using in-cart discount tiers, i.e. “Free shipping at $75, $10 off at $100, and $20 off at $150”.

2. Communication

Bryan points out that one of the biggest differences between Amazon and DTC is that you can’t talk to your customers on Amazon. 

You can use your website to collect emails, social followers, or phone numbers and leverage those for multiple touchpoints or direct communication for the purpose of troubleshooting, feedback, or advocacy. 

An application that has worked well for Bryan - limited-time offers. Email your list of advocates, best customers, or a waiting/pre-sale list and give them the heads up when an LT offer drops. You could sell out in minutes. 

3. Personalization

You don’t need to read a Gartner industry report to know this is the best way to stand out in a crowded digital environment. 

For Bryan, something as simple as personalized engravings has checked that box. 

But what your website offers that no other channel can compete with is the option for quizzes, tailored loyalty programs, gamification, and more. 

It takes some tactical testing and good execution, but the potential is unmatched. 

Takeaway: What use is this to our fellow DTC operators? Just do it in reverse, especially the bundling part (Dave Rekuc, President & COO @bambuearth). 

Quick hits

• Is this the end of mass “cheap product” sellers from China? The US is now checking China direct-to-consumer every parcel and finding, uh, some bad stuff.

• Instagram is investigating YT style unskippable ads.

• How to measure the “engaged audience” segment in your ASC+ campaigns.

• Fast-growing beverage company Poppi faces a lawsuit around its pre-biotic claims.