DTC vs. Marketplace: Strategic Trade-Offs in the Platform Economy

Supriya Bansal, Tarun Gupta

Abstract: This paper explores how brands must strategically choose between operating Direct-to-Consumer (DTC) models or leveraging marketplace platforms. It compares operational, financial, and consumer-centric trade-offs, drawing from real-world case studies and academic frameworks. Key strategic elements including profitability, customer data ownership, scalability, and brand control are analyzed to provide a practical decision-making framework for businesses. Findings suggest hybrid approaches increasingly dominate as brands evolve. This paper examines the strategic choice brands in digital commerce face between operating their own Direct-to-Consumer (DTC) models or joining marketplace platforms. The two operational models of online retailing operate through unique benefits, setbacks which stem from factors connected to operational management, customer reach, transaction expenses, brand presence. The evaluation of strategic business decisions between DTC platforms, marketplace platforms analyzes operational tactics as well as financial aspects along with consumer characteristics. The study connects academic literature to market data with business cases to provide retailers an operational platform for decision making. Data accessibility, scalability, brand control along with profitability together with customer lifetime value (CLV) form the core elements of this study. The study investigates how organizations handle combination distribution networks as part of their efforts to reduce channel competition. The paper utilizes various data resources such as secondary documentation alongside public financial records, validates its findings through brand interviews combined with direct simulations of marketplace-first , DTC-first distribution strategies. The study demonstrates channel tactics through practical examples involving Nike along with Anker, Allbirds , a Shopify-based startup. The research findings offer tactical recommendations which solve current difficulties of digital economy complexities so management teams can benefit from them together with academic experts, startup personnel. The research creates two beneficial outcomes because it helps create strategic plans, develops academic understanding regarding proper selection scenarios between DTC channels, marketplace participation, hybrid channel approaches.

Keywords: Direct-to-consumer, marketplace platforms, channel strategy, profitability, customer data, omnichannel, scalability

How to Cite?: Supriya Bansal, Tarun Gupta, "DTC vs. Marketplace: Strategic Trade-Offs in the Platform Economy", Volume 13 Issue 11, November 2024, International Journal of Science and Research (IJSR), Pages: 1897-1904, https://www.ijsr.net/getabstract.php?paperid=SR25426204922, DOI: https://dx.doi.org/10.21275/SR25426204922