It’s one of the conversations we have most often with eCommerce and marketing directors at CPG brands in LATAM, and it usually starts the same way: “We’re selling well on MercadoLibre, but we’re worried about margin. Should we open our own online store?”
The question seems simple. The answer almost never is.
Because D2C (Direct to Consumer) and Marketplaces aren’t opposing strategies. They’re not a binary choice. They’re channels with radically different logics, that serve different objectives, that require different capabilities, and that, when combined well, reinforce each other. When combined poorly, they compete with each other, dilute resources, and produce mediocre results in both.
In this article we give you the framework we use to help mass consumption brands in LATAM make this decision with judgment, with data, and with a clear roadmap.
First, let’s understand what each channel really means
The D2C channel: much more than your own store
D2C (Direct to Consumer) means selling directly to the end consumer, with no intermediaries. In the digital context, that generally implies your own online store (on platforms like Shopify, VTEX or Magento), but it can also include WhatsApp Commerce, a brand app, or even a direct subscription strategy.
What sets the D2C channel apart isn’t the technology. It’s the relationship. When you sell D2C, you know who’s buying from you, when, what, how often, how much they spend over time. You have the email, the phone number, the purchase history. That data is the most valuable asset the D2C channel builds, more so than the revenue it generates.
The D2C channel also gives you complete control over the experience: how the product is presented, what the purchase process looks like, how the brand communicates before, during and after the sale. That control is impossible to achieve on a marketplace, where the platform’s rules define the experience.
The Marketplace channel: much more than a fee you pay
Marketplaces have a bad reputation because of fees. And the fees are real: between 10% and 18% of revenue depending on category and platform. But reducing marketplaces to a cost means losing sight of their strategic function.
Marketplaces are, above all, discovery engines. When someone searches “chocolate whey protein” on MercadoLibre, they don’t have a pre-established brand preference. Any brand that appears well positioned has the chance to win that sale. That purchase-intent traffic with no prior brand loyalty is extremely valuable and enormously difficult to replicate on a D2C channel.
Marketplaces also solve the trust friction problem. A consumer who has never bought from your brand can buy it on MercadoLibre or Amazon because they trust the platform: they know there’s buyer protection, that there’s a return guarantee if the product doesn’t arrive, that reviews are (relatively) verified. Building that trust on a new D2C channel takes a lot of time and a lot of money.
The economics of each channel: beyond the fee
To make a well-founded strategic decision, you need to compare the real economics of each channel, not just the nominal fee.
Marketplace channel cost structure
Platform fee: 10-18% of the sale price.
Marketplace advertising: For competitive categories, Mercado Ads or Amazon Ads costs typically represent an additional 5-15% of revenue. In many categories, appearing in competitive positions without advertising is practically impossible.
Logistics: If you use MercadoFull or FBA (recommended for competitiveness), add storage, picking, packing and shipping costs. For a mid-priced mass consumption product, this can represent an additional 8-12%.
Total marketplace channel cost: Adding fee + advertising + logistics, the real cost can be between 25% and 40% of the sale price in competitive categories. That’s the number you have to compare against your contribution margin.
D2C channel cost structure
eCommerce platform: Shopify, VTEX or similar. Fixed monthly cost plus a small percentage of transactions (typically 0.5-2%).
Traffic acquisition: This is where the big miscalculation happens. Many brands compare the marketplace fee (10-18%) with the D2C acquisition cost and conclude that D2C is “cheaper.” But in D2C, if you want quality traffic at scale, you’re paying for Meta Ads, Google Ads, influencers, SEO, email marketing. For a brand without its own organic audience, D2C CAC (Customer Acquisition Cost) can be surprisingly high: between $15 and $60 USD per new customer, depending on the category.
In-house logistics: Contracting a 3PL or managing your own shipping has variable and fixed costs that in small or medium operations frequently exceed MercadoFull or FBA costs.
Additional technology: Payment gateway (Conekta, Stripe, OpenPay, Mercado Pago), CRM tools, email marketing, analytics, inventory management. These are costs that don’t exist on a marketplace because the platform handles them.
Real total D2C channel cost: For a brand without an established audience, the real acquisition + operating cost in D2C can easily exceed marketplace cost in the initial stages. Break-even arrives when the LTV (Lifetime Value) of acquired customers offsets that initial acquisition cost.
The asset everyone underestimates: first-party data
Here’s the most powerful reason to build a D2C channel, even at small volumes initially: the data.
When you sell on MercadoLibre or Amazon, the customer belongs to the marketplace, not to you. You don’t have their email. You don’t know who they are. You can’t retarget them. You can’t build a loyalty program. You can’t understand your consumer’s purchasing behavior beyond the aggregated data the seller center shows you.
When you sell D2C, every transaction builds an asset: a customer database with purchase history, product preferences, purchase frequency, response to communications. With that database you can:
- Calculate your customers’ real LTV and segment them by value.
- Design repurchase and subscription programs that turn occasional buyers into recurring customers.
- Build lookalike audiences on Meta and Google based on your best customers, to acquire new ones.
- Personalize communications that increase conversion and average order value.
- Reduce CAC over time as your own audience grows.
In a world where third-party cookies are disappearing and the cost of paid traffic keeps rising, brands that have first-party data on their consumers have a structural advantage that will keep widening over time.
The decision framework: when to prioritize marketplace, when D2C, and when both
Prioritize Marketplace if:
Your brand is new to the digital channel. The marketplace gives you immediate access to millions of potential buyers without needing to build traffic from scratch. It’s the lowest-friction channel to validate that your products and your price have real demand.
Your category has high intent search on marketplaces. If consumers search for your type of product directly on MercadoLibre or Amazon (electronics, tools, supplements, beauty products, accessories), the marketplace is where the active demand is, and ignoring it is a mistake.
Your average order value is low to medium (less than $500 MXN / $25 USD). At low ticket sizes, D2C CAC is usually very hard to recover on the first purchase. You need very high LTV or very high purchase frequency for D2C to be efficient. Marketplaces solve this better.
You have limited logistics capacity. MercadoFull or FBA solve logistics with variable costs. If you don’t have your own fulfillment infrastructure, the marketplace is the most sensible route.
Prioritize D2C if:
Your product has a very strong brand differentiator. If consumers specifically search for your brand, not just the category, you can capture that brand demand on your own platform at a lower cost than on a marketplace.
Your average order value is high and your potential LTV is significant. With products priced at $1,000 MXN or more, and especially with frequently repurchased products, the D2C financial model starts to become very attractive.
You want to sell by subscription. Marketplaces don’t have a competitive native subscription model. If your product is recurring consumption (supplements, coffee, personal care) and you want to build a subscription model, you need a D2C channel.
The shopping experience is part of your value proposition. Luxury brands, brands with a strong storytelling component, brands that sell “experiences” more than products: the experience control that D2C gives is irreplaceable for this type of brand.
The right mix: both channels in parallel with different roles
This is the answer we give most medium and large brands operating in LATAM: it’s not D2C or Marketplace. It’s Marketplace for acquisition + D2C for conversion, loyalty and data.
The Marketplace as a discovery and acquisition channel: Where a consumer who doesn’t know you finds you, tries your product, and has a first positive experience. The marketplace does the heavy lifting of driving traffic. Your job is to win the Buy Box, have the best content, and deliver on the shipping promise.
D2C as a relationship-deepening channel: Once the consumer knows you and has had a good experience, migrating that relationship to your own channel has enormous benefits. You can do this with smart incentives: a first-purchase discount in your store, a subscription with preferential pricing, a points program that doesn’t exist on the marketplace.
This strategy has a name in modern marketing: “conquer on the marketplace, retain on D2C.” Brands that execute it well see their revenue mix evolve over time: starting at 80/20 marketplace vs. D2C, eventually reaching 50/50 or even more balanced, with overall margins improving as D2C grows.
Cannibalization: the fear that paralyzes, and how to manage it
One of the reasons many brands avoid building a D2C channel when they already have marketplace presence is the fear of cannibalization: if I set up my online store at the same price, will the customers who already buy from me on MercadoLibre stop buying there?
Partial cannibalization is real. But there are three reasons it shouldn’t paralyze you:
First: Marketplace cannibalization by D2C isn’t revenue loss, it’s migration to a higher-margin channel. If a customer who used to buy from you on MercadoLibre at a 15% fee starts buying from your own store at a 0% acquisition cost (because they’re already your customer), you’ve improved your unit economics.
Second: Marketplace buyers and D2C buyers typically have different motivations. The marketplace buyer is looking to compare options, seeking the best deal of the moment, valuing the platform’s protection. The D2C buyer already trusts your brand and is looking for a more direct relationship. These profiles overlap less than it seems.
Third: Differentiating the offer between channels can actively manage cannibalization. Products exclusive to the D2C channel, bundles not available on the marketplace, memberships and subscriptions: there are many ways to create incentives for your own channel that don’t directly conflict with the marketplace offer.
Common mistakes in defining your channel mix
Mistake 1: Opening the D2C channel without a traffic plan. Putting up a Shopify store doesn’t automatically generate sales. Traffic has to be built (SEO, email, social media, paid media). Many brands underestimate this effort and conclude “D2C doesn’t work” when in reality they never activated it correctly.
Mistake 2: Having different prices per channel without clear logic. If your D2C store has the same price as MercadoLibre but without MercadoLibre’s free shipping or its buyer protection, consumers will systematically choose the marketplace. You need a differentiated value proposition per channel: a slightly better price, free shipping above a certain amount, loyalty benefits, or an exclusive product.
Mistake 3: Not measuring LTV by channel. First-purchase revenue isn’t the right metric to compare D2C vs. marketplace. What matters is total revenue over the customer’s lifetime. A D2C customer with 4 purchases a year over 2 years is worth much more than a marketplace buyer who purchases once and disappears. If you’re not calculating LTV by channel, you’re making investment decisions without the right data.
Mistake 4: Operating both channels with the same operational logic. The marketplace requires pricing agility, constant monitoring of seller metrics, and active content management. D2C requires investment in CRM, email marketing, UX/UI and retention. These are different competencies. Brands that manage both channels with the same team and the same attention tend to be mediocre at both.
The maturity model: how the mix evolves over time
Based on the evolution of the brands we’ve supported in LATAM, there’s a fairly consistent maturity pattern:
Stage 1 - Validation (year 1): 90%+ marketplace. The focus is proving the product has demand, building seller reputation, and optimizing the operation. D2C may exist but with minimal investment.
Stage 2 - Building (year 2): 70-80% marketplace, 20-30% D2C. Investment starts in the own channel: organic traffic (SEO, social media), email list building, first retention experiments. D2C isn’t profitable yet on acquisition cost, but the data asset is being built.
Stage 3 - Balance (year 3-4): 50-65% marketplace, 35-50% D2C. The D2C channel starts having a base of recurring customers that reduces average CAC. D2C margin clearly surpasses marketplace margin. The brand starts seeing itself as a digital business with multiple channels, not a marketplace seller with a side store.
Stage 4 - Optimization (year 5+): The mix is optimized based on specific objectives: marketplace for categories with high generic search, D2C for premium products, subscriptions and high-value customers. It can reach 40-60% in either direction depending on the category and the brand.
Conclusion: the right mix doesn’t exist — the right mix for your brand does
There’s no universal formula. A high-frequency sports supplement brand has a very different mix logic than a high-consideration consumer electronics brand. A brand validating a new market has very different needs than an established brand looking to improve its margins.
What is universal is the need to make this decision with data, with a clear understanding of each channel’s economics, and with a long-term strategy that doesn’t sacrifice the future (building data and customer relationships) for the short term (maximizing this month’s revenue).
The D2C channel is an investment with deferred returns. Marketplaces are immediate revenue with limited margin and scarce data. The brand that learns to use both intelligently builds a solid digital business that’s hard to replicate.
What’s your operation’s current mix between D2C and marketplace? Are you satisfied with it, or do you feel you should be investing more in a specific channel? Tell us in the comments. If you want to run an analysis of your channel economics and define an optimized mix strategy for your category and market, we can help.
By Matías Poso, CEO at Balloon Group a Fastforward AI Company.