How Direct-to-Consumer (D2C) Fulfillment Can Take Your Brand to the Next Level

1. Increased Dependence on Platform Policies & Fees

• Amazon frequently increases seller fees, making it less profitable to sell exclusively on the platform.
• Sellers have no control over sudden policy changes, which can impact their margins overnight.
• Example: Temu vs. Amazon pricing shows that sellers often make more money selling at a lower price on Temu than at a higher price on Amazon due to excessive fees.

2. Inventory & Fulfillment Disruptions

• Amazon FBA & AWD have intake delays that can cause stockouts, leading to missed sales opportunities.
• Relying on one fulfillment provider can result in:
  • Shipping delays
  • Higher costs during peak seasons
  • Inconsistent inventory placement
• Example: Sellers using Amazon-only fulfillment see major spikes in fulfillment costs when scaling up multi-channel.

3. Lack of Customer Ownership & Retention

• On platforms like Amazon, sellers do not own customer data (emails, demographics, preferences).
• This makes remarketing & repeat purchases difficult, forcing sellers to pay for customer acquisition repeatedly instead of building loyalty.
• Example: D2C brands leveraging Shopify can run email campaigns, offer loyalty programs, and upsell products—strategies unavailable on Amazon.

4. Vulnerability to Algorithm & Search Ranking Changes

• Amazon and other platforms control product visibility through their ranking algorithms.
• Changes to SEO ranking rules or sponsored ad costs can make a previously profitable product disappear from search results overnight.
• Example: A seller on the West Coast realized their products didn’t appear in search results the same way nationwide, impacting sales.

5. Account Suspension or Listing Removal Risks

• Sellers face sudden account suspensions or listing removals due to policy violations or competitor attacks.
• Amazon frequently updates compliance requirements, and failing to meet them can lead to temporary or permanent bans.
• Example: A seller was making millions annually but had their products pulled due to new Amazon regulations, causing business shutdown overnight.

6. Limited Pricing & Profitability Control

• Amazon dictates pricing rules, limiting flexibility in discounts, promotions, and premium pricing strategies.
• Sellers often lower prices to stay competitive, but Amazon still takes a large cut in fees, reducing profitability.
• Example: Sellers who expanded to multi-channel (Shopify, Walmart, TikTok) saw higher margins due to lower fulfillment & platform costs.

7. Market Competition & Copycat Sellers

• Amazon often prioritizes its own private-label brands over third-party sellers.
• Competitors can copy product listings, undercut pricing, or hijack product rankings using aggressive tactics.
• Example: Brands that diversify into Shopify + TikTok prevent competitors from controlling their customer acquisition channels.

8. Geographic Limitations & Regional Bias

• Amazon & other marketplaces may not distribute products evenly across regions.
• Example: A seller assumed their product was visible nationwide, but Amazon’s warehouse allocation limited exposure to certain regions (e.g., not appearing in search results on the West Coast).

9. Growth Limitations & Scalability Challenges

• Scaling solely on Amazon or Shopify can be inefficient & costly, as sellers outgrow the platform’s capabilities.

• Example: Brands with 400K+ orders per year found that using multiple fulfillment networks reduced costs and improved delivery speeds.

10. High Cost of Customer Acquisition

• Without D2C capabilities, sellers rely solely on paid ads to generate sales.

• Amazon Ads & PPC costs have skyrocketed, making profitability harder to maintain.
• D2C brands leverage SEO, organic content, and email marketing to reduce dependency on paid ads.