In the past decade, marketing and competition have become an almost unrecognizable picture. The rise of the internet paved the way for some of the most innovative and investment-worthy opportunities known to mankind. Thanks to social media, online marketing, which only required minimal financial input to begin, launched the most successful companies.
The successful marketing engine that unfolded into the 21st-century internet boom is called Direct-to-Consumer marketing or D2C. This marketing strategy works through delivering products into the hands of the consumer, directly from the company. Thus, it bypasses all third party prospects previously required as a supplier, manufacturer, wholesaler, distributor, or retailer. D2C quantifies itself as the number one way to start up a company today and increase customer loyalty.
As amazing as D2C is at the beginning of a company’s growth, it fails to sustain itself in the long run.
“Ninety-eight percent of DTC brands are out of business, they just don’t know it yet,” said Gary Vaynerchuk, founder, and CEO of VaynerMedia. “They don’t have the fundamentals to continue to acquire customers at a value that’s right, and the [venture] money will eventually dry out.” What once worked through ample venture capital, low competition, and inexpensive social media outlets, fails to hit the mark today. Many famous companies who once led the initiative have failed to adapt to changing times and have suffered or closed, including JCPenney, Blockbuster, Macy’s, RadioShack, ToysRUs, and more. For a growing company to expand and mature as a thriving and developed company, it must plan to integrate vertically.
According to The Harvard Business Review, “As mature brands compete for the same digital impressions as scrappy upstarts, they obliterate the arbitrage that was once a DTC’s competitive advantage. Any margin that early DTCs preserved by cutting out middlemen ultimately lost to expensive, individualized distribution. As customer acquisition costs (CAC) increase across the board, brands must plan to vertically integrate (by, for instance, creating their own manufacturing operations instead of contracting it out) in order to preserve margins and survive.”
One New York-based nutraceutical company, CanaFarma, is excelling in marketing and brand growth, gaining tremendous profit growth in the last year. As they rise to match their competitors, CanaFarma’s distinct Direct-to-Consumer Method has been their platform of success. Recently, they published a sales analysis from the first 6-month in sales:
- The Re-order rate of products by customers in its YOOFORIC™ brand was 68%.
- The daily order count was approximately 300 orders per day, which was in line with budget expectations.
- The cost to acquire customers or Cost Per Acquisition (“CPA”) was 10% lower than had been budgeted.
- The company’s re-marketing efforts to customers achieved results, which were 28% better than projections.
- 65% of customers also chose to try a second product under the YOOFORIC™ brand, demonstrating a high degree of confidence in our brand equity and credibility
Since signing a Letter of Intent to acquire land and a 25,000 sq ft building, producing more hemp-oil based wellness products, they have developed a vertical integration plan. This initiative will not only work to produce CanaFarma’s own hemp oil, but function to be a supplier, manufacturer, wholesaler, distributor, and retailer. CanaFarma’s extensive experience and knowledge set them up to be the ideal candidate to take on the challenge and achieve a rapid scale.
For more information, visit https://www.canafarmacorp.com/.