Starting a new brand - Should you go marketplace or D2C?

Whether to start with marketplaces or your own D2C (direct-to-consumer) site depends a lot on your goals, resources, and stage of business. Let’s break it down:

🚪 Marketplaces (e.g., Amazon, Etsy, Walmart, etc.)

✅ Pros:

• Instant Traffic: Huge built-in customer base, so you can get sales right away without needing to build an audience.

• Trust: Customers trust platforms like Amazon more than a random new website.

• Infrastructure: Logistics, returns, customer service tools — already in place.

• Testing Ground: Great for validating your product-market fit before going all-in on your brand.

❌ Cons:

• Lack of Brand Control: You're just one of many sellers. Difficult to stand out and build a brand identity. Typically repeat purchase rates are lower.

• Fees & Commissions: They take a decent cut (could be 15–40% depending on the platform) + also put pricing constraints on you.

• Limited Customer Data: You don’t fully "own" your customer — limited access to emails, insights, and retargeting ability.

• Algorithm Dependency: If you're not ranking, you’re invisible. Constant battle to stay visible and competitive.

🏠 Direct-to-Consumer (via your own website, like Shopify)

✅ Pros:

• Brand Control: Full control over how your brand looks, feels, and communicates.

• Customer Ownership: You get emails, behavior data, LTV potential — can build long-term relationships. Higher repeat rates if you can build loyalty.

• Higher Margins: You keep more of the sale since there are no marketplace commissions.

• Flexibility: You can test bundles, upsells, subscriptions, loyalty programs — anything.

❌ Cons:

• Traffic is on you: No one's coming unless you drive them (via ads, SEO, influencer, etc.).

• Higher Startup Costs: Need to invest in branding, site dev, email marketing, etc.

• Trust Barrier: New customers may be hesitant to purchase from an unknown site.

• Complex Ops: Fulfillment, returns, and support — all need to be figured out.

🔄 Hybrid Strategy (how newer brands are doing it)

A lot of smart brands start with marketplaces to get traction, validate demand, and build cash flow — then gradually shift focus to D2C where they can maximize margins and build a brand moat.

Market Play (US / India)

The US and India are very different eCommerce ecosystems, and the marketplace vs. D2C decision plays out differently in each. Here's a breakdown by country:

🇺🇸 United States

Marketplaces

• Dominant Player: Amazon (~40% of US eCom) — most Americans start their product search there.

• High Trust: Consumers trust Amazon reviews and Prime shipping. Great for conversion.

• Saturated: Competitive and ad-heavy. Margins can be tight.

• Best For: Fast-moving CPG, commoditized goods, or product validation.

D2C

• Strong Infrastructure: Shopify, Klaviyo, Meta Ads — D2C tooling is robust and well-integrated.

• Higher CAC: Ads (especially on Meta/Google) are expensive, so acquiring customers can be tough unless you nail your creative and positioning.

• Huge Brand Potential: US consumers are open to discovering new brands. If you're building a lifestyle brand or solving a niche problem, D2C is powerful.

🔁 US Strategy Tip: Many brands start D2C-first with storytelling and brand building, then expand to Amazon for volume later.

🇮🇳 India

Marketplaces

• Dominant Players: Amazon India, Flipkart, Meesho (especially Tier 2–3), and now even JioMart.

• Price-Sensitive Market: Shoppers prioritize deals and convenience.

• Trust in Marketplaces > D2C: Many consumers feel safer buying from Flipkart/Amazon due to cash-on-delivery, easy returns, etc.

• Logistics: Marketplaces solve the hardest part — last-mile delivery across 20k+ pin codes.

D2C

• Lower CAC (for now): Influencer marketing, Instagram, and WhatsApp commerce are powerful — but it’s still early days.

• Logistics Hurdles: Shipping and returns are more complex if you go it alone.

• Trust Building: COD and WhatsApp support are almost essential for conversion.

• Tier 1 Bias: D2C brands mainly target urban consumers — Delhi, Mumbai, Bangalore, etc.

🔁 India Strategy Tip: Many founders launch on marketplaces first to get distribution and trust, then build a D2C site + community for retention and upsell.

🌍 Key Differences Summary