ACOS VS TACOS

Transcript:

So this is a very interesting question. If you are planning to start d2c, I would highly recommend you to start with Marketplace as a channel first, especially if you are a bootstrapped brand and not a funded one.

Why I say this is because Marketplace as a channel will give you a lot of initial push in terms of your brand visibility, as well as initial profits that you can further reinvest in your D2C channel later.

It's really hard for a customer to trust an unknown brand and their website. But people trust Amazon. I've seen a lot of people taking a different route saying, Amazon commissions are really high.

I can invest those commissions into my ads. I'll make more money if I do Facebook ads, Instagram ads, because there are no commissions that I need to pay on my website, etc, etc.

But what they don't understand is it's really hard to get initial customers. So, for example, if you are a beauty brand in categories like Beauty health care, the real profits lie in repeat purchase. If you're able to drive initial customers through Amazon and if they like your product, it's a lot easier for them to trust your D2C channel as well.

I can recall this conversation that I had with the head of marketing of one of the top Indian brands selling health supplements. I'll not take the name. They are one of the top now, but when I was managing them four or five years back, they were not that big.

But the conversation was like Himanshu, I don't care what you do with my ads. I want my weigh protein to be delivered in each and every home where there are fitness enthusiasts.

That's the only goal that I have in my mind right now. I will make profits from cross sell up sell, repeat purchases, but you give me as many new to brand customers as you can. And when I look back, it makes a lot of sense as well as I see them ruling the health supplements markets now.

And there are many such examples like Boat, Mama earth, Wow skin science, etc, etc. And all of them got big through Marketplace as a channel.