Why Your DTC Brand is Losing Money by Managing Amazon and TikTok Shops In-House

It might seem counterintuitive, but managing your Amazon and TikTok Shops in-house could be the reason your direct-to-consumer (DTC) brand is not scaling as expected. Many DTC brand owners think they're saving money by keeping these operations internal, but the reality is often quite different. Here’s why outsourcing to specialists like Dayly Group could be the best decision for your brand’s bottom line.

The Cost of In-House Management

When you handle Amazon and TikTok Shops internally, you might feel you have control over your brand’s operations. However, the hidden costs can be staggering. The salary of a single full-time Amazon or TikTok shop manager ranges from $70,000 to $100,000 per year. Multiply that by two for both platforms, and you’re looking at a significant financial commitment.

Moreover, the expertise required to navigate the constantly evolving landscape of these platforms is substantial. The algorithms on Amazon change frequently, impacting everything from product ranking to advertising effectiveness. Similarly, TikTok’s ever-shifting trends demand a team that’s not just reactive, but proactive. Without the right skills and up-to-date knowledge, opportunities slip through the cracks, costing you potential revenue.

Expertise Drives Performance

Having run over 30 brands, I can tell you that the key to thriving on Amazon and TikTok is expertise. Each platform has its own set of rules and best practices that can dramatically impact your sales performance. For example, Amazon’s A9 algorithm considers over 200 factors when ranking products. If your team isn’t fluent in these factors, you’re likely losing visibility to better-optimized competitors.

On TikTok, the continuous flow of new trends means your brand needs to stay agile. A campaign that worked last week might not deliver the same results today. Experts who understand these nuances can make adjustments in real-time to keep your brand relevant and engaging.

The Advantage of Specialized Agencies

Outsourcing to a boutique agency like Dayly Group provides access to a team of specialists without the overhead costs of full-time employees. Our team stays ahead of the curve, consistently testing and implementing new strategies across both platforms. This approach has resulted in an average revenue increase of 25% for the brands we manage.

Furthermore, agencies can leverage economies of scale, optimizing advertising budgets across multiple clients. This means your brand benefits from lower costs per click and higher return on ad spend (ROAS) than you might achieve independently. For instance, our clients have seen up to a 40% improvement in ROAS after partnering with us.

Real-World Success Stories

Consider a DTC skincare brand that decided to outsource its Amazon operations after struggling to surpass annual revenues of $5 million. Within a year of working with us, they saw a 60% increase in sales, driven by improved listing optimization and strategic advertising campaigns.

Similarly, a fashion brand struggling on TikTok found new life when they outsourced their shop management. By tapping into viral trends and creating engaging content, their follower count grew by 200% in six months, with a corresponding spike in sales.

When to Make the Move

The decision to outsource is not just about cost savings. It’s about accelerating growth and driving efficiencies that you can't achieve in-house. If your brand has hit a plateau, or if managing these platforms is taking time away from product development and customer engagement, it might be time to consider outsourcing.

To truly assess whether outsourcing is the right move, consider booking a Gap Analysis call with us. This isn’t a sales pitch, just a conversation to explore where your brand stands and how we might help bridge the gaps in your current strategy.

Your DTC brand deserves the best chance to thrive. Don’t let the fear of losing control keep you from exploring options that could propel your business forward.