Should your brand choose B2C vs D2C? There's no right or wrong answer since both models come with serious advantages in a world dominated by the desire for fast, convenient service.

E-commerce is booming across the board, with the B2C e-commerce and retail expected to see the biggest growth over the next few years. However, D2C is starting to gain traction as more customers seek out extremely unique and personalized shopping experiences. Whether you want to provide a more direct relationship to repeat customers or want to take advantage of the growing business to consumer market, either option could be incredibly lucrative.

We want you to feel confident in making the switch, so we're going to explore D2C and B2C. You'll learn the advantages and disadvantages of each business model and whether or not they'll match your aspirations for the future.

Key Takeaways

• B2C is short for business to consumer, referring to a business model that sells products or services to customers through third-party platforms. D2C (or DTC) is short for direct to consumer, eliminating third-party platforms in favor of more one-on-one sales.

• The B2C model is easier to start and comes with benefits such as support in supply, fulfillment, and delivery. However, the D2C model has the advantage of more control over brand identity and customer interaction.

• Crafting online stores that attract and delight customers is easier with the help of a marketing partner with first-hand experience growing businesses. Rightpoint works with brands across industries such as CPG, hospitality, and more to help them craft an unforgettable customer experience.

The Differences and Similarities of B2C vs. D2C

D2C and B2C seem similar at a glance since they both work directly with customers (compared to a B2B model that works with other businesses). However, the main difference lies in the method -- the B2C model requires businesses to sell products or services through a larger retailer or distributor, while a D2C model eliminates the middleman.

Let's dive a little deeper into the ins and outs of these business models to give you the full picture.

The Similarities of B2C vs. D2C

Both Depend on Direct Purchases from Customers

It's easier to understand how these business models work with real-life examples. Let's use a theoretical online fashion store to paint a picture on how B2C and D2C works.

An online fashion brand may use the B2C model to sell their sweatshirts and sweatpants. They could use popular online retailers, such as Amazon or Etsy, as a middleman to sell their products. The customer still gets to interact with them, such as leaving comments or asking questions.

Another online fashion brand may use the D2C model to sell handmade dresses and skirts. Instead of using online retailers as the go-between for the customer, they sell directly through their own website or blog. The customer will have even more channels to interact with them since there are fewer barriers imposed by a third-party platform.

B2C and D2C Frequently Rely on Ecommerce for Sales

While D2C and B2C can take on many forms, both online and in-person, they're quite popular for digital commerce. Selling online through a retailer's website or an original website is cheaper than building a brick-and-mortar store.

Did you know ecommerce was responsible for 33% of all retail sales in 2020? That was from a 16% increase, a strong sign of the growing appetite for a convenient online customer experience.

The Differences of B2C vs. D2C

B2C Brands Use a Third-Party Channel to Sell Products

The business to consumer model fundamentally relies on a complex network of retailers and distributors to deliver products or services to customers. This third-party channel comes with upsides and downsides depending on how much control you want for your business.

D2C Uses Independent Platforms to Sell to Customers

From the food and beverage brand Misfit Markets to the sustainable shoe brand Allbirds, D2C brands have taken off as a must-have resource for innovative businesses. A major contributor to these brands' success is the independence that comes with the D2C model.

While a B2C model can limit what you sell or how you sell it, the D2C model offers almost complete freedom in the business design process.

The Benefits and Downsides to B2C

The buyer's journey is only getting more complex. Customers today have more options than they ever have for buying new products, upgrading old products, or seeking out services to make their lives easier.

When you consider D2C vs. B2C, you've already done half the work for meeting customers halfway.

The Benefits of B2C

Highly Accessible for New Businesses

Setting up a business is difficult because of all the working parts you have to consider. Warehousing, shipping, fulfillment, designing a website, crafting a brand identity...these are just a few of the details you have to take into mind.

With the help of a business to consumer in-person retailer or online storefront, most of the work is already done for you. Your brand is able to use accessible tools like a pre-existing online storefront or customer service help desk to take some of the work off your plate. As such, you can jump straight into selling within a matter of days.

Lower Risk Thanks to Established Channels

Are you afraid you won't be able to get enough customer acquisition to start balancing out your start-up costs? With a B2C storefront, you have a lower risk since much of the marketing and brand reputation is handled for you.

Instead of painstakingly building up your brand's reputation little by little, you can 'piggyback' off of a B2C retailer. For example, a customer selling through Wal-Mart won't have to worry much about reliable delivery services or payment portals since the brand already handles the bulk of sales and fulfillment. Any customer who already trusts Wal-Mart to deliver a good customer experience will extend a little of that trust to you.

The Downsides of B2C

Less Control Over Business Operations Due to Third-Party Selling

Since the B2C storefront relies on a middleman to complete a business transaction, much of the control is out of your hands. You don't get to decide which payments a customer can use or how they can contact you.

Depending on how you produce and sell your products, you may even have limitations on the supply chain or marketing strategies. While these features can be helpful for new business owners or small teams who need help, they can be limiting for brands who want more control over the finer details.

Fulfillment And Inventory Can Be Challenging to Maintain

On one hand, B2C can be helpful for fulfillment and inventory if they handle the majority of keeping your products in stock. They can keep track of order volumes, handle customer complaints, and keep track of rules and regulations.

On the other hand, you may still be limited when it comes to choosing ecommerce integration features or customer preferences. Everything you sell and market still has to go through the platform, increasing the risk of hitting a snag on how you like to operate your business.

Customer Interactions Are Mediated Through Third-Parties

If you prefer to address the customer journey directly, up to and including reviews or complaints, the B2C model will feel restricting. Third-party retailers will have specific modes of operation when it comes to talking with customers to maintain their brand image, which could clash with yours.

The Benefits of D2C

D2C Is Only Growing in Demand

Not only is D2C becoming a favorite of customers seeking personalized experiences, but some industries are also seeing faster-than-average growth. According to a 2023 study, fashion, accessories, and electronics are the fastest growing product categories for D2C.

What's the reason behind the growing interest in direct to consumer? Customers continue to look for personalized experiences to get the most value for their dollar, while more brands want control over their brand identity.

Higher Profit Margins Due to Fewer Players

While B2C channels may start making you money faster, D2C may be more lucrative in the long run. Since there are fewer middleman taking a cut of your earnings, your profit margins could be higher than you ever imagined after a few years of hard work.

Flexibility When Pricing Products

Control over pricing is another feature that feeds potential profit margins. Kate Ross, the marketing specialist for beauty company Irresistible Me, enjoys D2C's ability to adapt to almost lighting-fast changes. She finds that flexibility can be a lesser-known detail for brands unsure whether to choose B2C or D2C.

"B2C brands sometimes struggle with restrictions or expectations set by retailers. D2C brands can test pricing, offer flash sales, or bundle products freely critical for a dynamic market."

Greater Control Over Brand Identity

Do you want complete control over everything from your website's design to your brand voice? The B2C model won't be as appealing as D2C since most of your brand identity will be out of your hands.

While you'll still be able to have some customization in areas like product descriptions or the products themselves, many of your customers' touchpoint will go through the retailer or distribution channels first.

More Access to Influencer Marketing Strategies

If you've considered tapping into the influencer market, D2C will give you more control than B2C. Kate Ross has found the restrictive customer data of B2C can get in the way of understanding influencer marketing's impact.

"In B2C, influencers may drive traffic to third-party retailers, so it’s harder to track ROI. D2C benefits directly because influencers drive traffic to your owned platform."

Direct Communication to Customers

A direct relationship is only becoming more appealing for both businesses and customers. Customer satisfaction doesn't only lie in a seamless customer journey or high-quality product, but having their concerns listened to and resolved swiftly.

According to a 2018 survey on customer survey, customers overwhelmingly favored knowledgeable customer service agents as well as single-call resolution time when it came topositive customer service experiences. These elements are much easier to control when you're at the wheel compared to help desks that may or may not specialize in your industry.

The Downsides of D2C

D2C Needs More Marketing Efforts to Stand Out

Customer acquisition will be harder with D2C since you don't have pre-existing channels to give you a leg up in your reputation. Everything from gathering up valuable customer insights to marketing your products will be your responsibility.

However, you're not alone when it comes to gathering up valuable customer data to feed your marketing and sales efforts. Partnering with marketing firms will help you with the heavy lifting of building a loyal customer base with cutting-edge tools and a seasoned team. We regularly help brands across multiple business models gather customer insights or craft content.

Customer Service is More Hands-On

Likewise, committing to customer satisfaction will be another responsibility on your plate. While a B2C platform usually has a dedicated help desk and customer service agents, you'll need to be comfortable talking to customers one-on-one.

This approach can look like talking to customers over the phone, answering their email, or hiring your own help desk to address their concerns. If you have a tight schedule or prefer to focus on creating products over talking with customers, this model could prove a challenge.

Should Your Brand Choose B2C or D2C?

Now that you've got a bigger idea on the ins and outs of D2C vs B2C, it's time to start narrowing down the best option for you. Again, there's no right or wrong answer. Your industry, niche, and unique value proposition will determine which model will bring you -- and your customers -- the most satisfaction.

B2C Is Well-Suited to Businesses in Established Industries

Do you already work in a thriving industry experiencing high amounts of demand? You may prefer a B2C model so you can jump straight into selling your products or services directly through an existing channel.

B2C e-commerce is seeing explosive growth across media, beauty, food and beverage, and household appliances, among others.

D2C is Ideal for Innovative Start-Ups

When you're providing products or services in a growing niche, D2C may give you the flexibility you're looking for. Instead of waiting for B2C distribution channels to eventually offer the platform you need, you can simply create your own.

Many D2C brands have found immense success by providing an extra level of convenience or innovation not found in many major brands, such as Quip's oral care subscription service or Warby's online supply of prescription glasses and sunglasses. If you have a one-of-a-kind idea, D2C may give you the freedom to stretch your entrepreneurial wings.

Rightpoint Will Be Your Partner To Launch A B2C Or D2C Business

The D2C and B2C comparison is only going to become more common from here. There are so many opportunities to sell services directly -- or almost directly -- to customers, it's hard to keep track of them all.

We're here to help you out. Rightpoint is a marketing firm dedicated to helping bridge the gap between businesses and their target audience by offering a well-rounded suite of tools and first-hand experience. Together we'll work to gather more customer insights, craft SEO-optimized marketing strategies, and get you that much closer to the stable business you've always dreamed of.

Give yourself an edge in today's competitive market by taking control of your own online stores. Contact us today to start gathering customer data and building strategies that set you apart.