How Commaxx gained better margins with D2C

Gaining a new edge with D2C

How does a consumer electronics brand owner safeguard their business with more resilient distribution and better margins? Take some inspiration from Commaxx, which did exactly that by launching a Direct-to-Consumer (D2C) initiative 5 years ago.

Founded in 1994, the company has grown into a world leader in the development and sale of ‘smart choice’ consumer electronics. The company owns several distinct electronics brands, covering a diverse portfolio of categories and target markets.

Their expansive product selection ranges from precision hi-fi audio to smart home products, quality kitchen appliances – and everything in between. Commaxx’s brands are sold around the world to retailers and importers, under a wide range of brand names.

Today, they successfully sell directly to the consumer too, via multiple online channels. This selling model enables Commaxx to respond directly to their customers’ needs and demands by creating better products and more compelling offers. Additionally, D2C can massively improve margins, while making the company less dependent on any single distribution strategy.  

Marketplace integration: evaluating the options

For decades, the company had been successfully distributing their brands through B2B channels, however Commaxx wanted to start their own D2C model. By selling directly to their consumers using dedicated webshops and a complete range of other online channels, Commaxx could develop a closer relationship with them. 

To begin with, they started to work with another marketplace integration and management provider, but they were disappointed with the high costs and the unrealized revenue potential from their incredible assortment.

So, Commaxx started to look more closely at all the options for marketplace integrators and what they offered.

With over 1,000 SKUs, spread across several brands, it was clear that the chosen solution needed to be powerful enough for a global player like Commaxx. Their products have incredibly varied attributes, so managing content and categories across marketplaces (in multiple countries) is a considerable challenge.

With several alternatives on the table, Commaxx took a methodical and logical approach: they created a shortlist of potential partners, and a matrix of pros and cons. This approach enabled the Commaxx team to try out the software and evaluate the user experience for each platform.

So, which did they choose?

A perfect integration

As you might have guessed, Commaxx chose ChannelEngine as their preferred platform.

It gave them the greatest capabilities, widest selection of marketplaces, a favorable price structure, and – most importantly – it was intuitive and easy to use from the start.

By trialing the platform, they got to see for themselves what it could offer and get to grips with the user experience.

Commaxx was already using the Akeneo PIM, so it was easy to integrate with ChannelEngine (Akeneo is a ChannelEngine partner). They were up and running in record time.

As an owner of multiple brands, the company gains the most value from ChannelEngine’s content mapping and content management capabilities. With so many diverse brands and categories, this is essential to ensure the best sales results. A global company like Commaxx must manage more than 5,000 different attributes for their products, in 4 languages. With ambitions to expand even further in the future, this would double to 8 languages before long, so they chose a platform that could help support and handle this growth.

Of course, the ChannelEngine platform offers more benefits to sellers besides content management – and Commaxx is using these very effectively.

The company leverages price rules to include shipping costs and margins, and they use hybrid fulfillment to ensure the customer is never left wanting. By deploying a combination of their own fulfillment with fulfillment by Amazon (FBA) and fulfillment by Bol.com (FBB), they can automatically switch between fulfillment solutions whenever one location sells out. This means that if Bol.com runs out of stock, they can start fulfilling orders from their own fulfillment center.

Exponential growth

Commaxx started working with ChannelEngine in February 2021. At that time they had just 3 marketplaces and 2 webshops already set up.

After using ChannelEngine for 2 years, the company is now selling their brands across 31 marketplaces, with full content, order, and returns management. The ChannelEngine customer success team has been with them every step of the way, to ensure they get the support they need to extract the maximum value from marketplace selling.

The company hasn’t only grown sales with new channels, they’ve also grown sales with existing channels too. Order information is more efficiently imported to their ERP, thanks to a seamless integration, and everything is working really well.

Starting a D2C initiative is always a gamble, as a brand owner never knows if they are creating channel conflict or competing with their own B2B sales. However, Commaxx has seen a huge benefit in terms of revenue and resilience.

The company's size has undergone an expansion of over 150% to match the rapid growth driven by D2C sales, and the marketplace department is very happy with the results. Revenue from marketplaces has been growing by 50% each year since starting with ChannelEngine and they’re expecting a similar increase this year too.

Following the success of their D2C initiative, the B2B side of their business is also now selling on select marketplaces like Conrad and OrderChamp, to reach more business customers than before.

Leveraging their strategic advantage for future growth

Commaxx has gained a strategic advantage with their D2C model, which enables the company to capture healthy margins and gives them a wider base of distribution channels for their products. Being located in The Netherlands puts the company in a fantastic position, with excellent infrastructure links to the rest of Europe and beyond.

The company is encouraged by their successful marketplace strategy, and they’re looking to keep expanding into new channels and regions. However, fulfilling all orders from The Netherlands isn’t always the best option for every destination. To facilitate a wider reach, they’re piloting an FBA program that fulfills sales from other channels – a particularly useful option when it’s too expensive to ship to countries themselves, but are covered by FBA. This massively lowers the barrier for entry into new markets.

D2C, accompanied by ChannelEngine’s wide array of integrations, has already been a resounding success for Commaxx - but it looks like the best is yet to come.