Wednesday August 12, 2020 |Notes

How to find direct to consumer opportunities

It's easier than ever to build direct to consumer brands. Existing ecommerce infrastructure makes it relatively easy to get a business going quickly, with great options for everything from storefronts, payments, marketing, shipping, and fulfillment. There are an abundance of opportunities ready to be discovered within online communities.

The tools for creating a digital-first brand are available everyone now. Companies like Shopify continue to make improvements that enable individuals to access tools that would otherwise require entire teams of engineers. Packy McCormick wrote about the effects of Shopify making these tools ubiquitous in his NotBoring substack recently.

If I were a rebel starting a sunglasses company, let’s call it Rebel Sunglasses, and didn’t want to go through Amazon (the empire), here’s what I would do. I could find and order product wholesale on Alibaba, set up a store on Shopify, drive customers to the site by buying ads on Facebook, Google, and Instagram, either myself or by hiring a growth marketing contractor on Marketerhire, take payments via Stripe, drop ship directly from China with Boxc or import with Flexport and ship with USPS, answer customer questions on Zendesk or Kustomer, and return items via Returnly.

Not all companies do it this way, of course. Many do their own R&D, set up their own supply chain, lease their own warehouses, and acquire customers in novel ways. Some roll their own tech stack to make sure that their tech meets their companies’ unique needs.

But the fact that competitors can easily launch a DTC product means that any one brand’s strategic position, and ability to generate profits over the long-term, is weakened.

Packy focuses on the problems of differentiation when many of the business problems have already been solved. While much more is spent on marketing, there's an opportunity for businesses to use the money to build better products by truly focusing on specific niches. This is more than just marketing to a specific group and involves creating crafting a product specifically for a given niche.

Last week, I linked to a post about Unbundling Reddit by Greg Isenberg. He followed up with a related tweet this week that outlined simple strategy for finding direct-to-consumer opportunities:

How to find DTC opportunities:

  • Understand what people want. Talk to people in Subreddits/FB groups
  • Install Helium10/JungleScout
  • Discover sales, profit, costs for competing products
  • Create a landing page/waitlist to gauge demand

There are endless opportunities out there for niche direct to consumer brands. Existing tools make it easier than ever. Early companies had to build the infrastructure, which helped them stand apart from competitors. It takes more than simply connecting the pipes now, and more resources can be put towards building differentiated products.

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