Marketing agency for startups: when should a D2C startup hire one?

A D2C startup should hire a marketing agency after it has sold its first few hundred orders and knows what one order earns, and before that it should run a small test itself. Before that point an agency is paid to guess. After it, an agency is paid to repeat something that already works.

We run ads for D2C brands, so we gain if you hire one. Read this as a checklist you can use on any agency, us included. How we work with D2C brands is on our D2C marketing agency page.

Before your first sale, an agency cannot fix what is missing

If you have no product photos that sell, no page that converts and no reviews, ads send strangers to a shop they will leave. You or a freelancer can run a small test budget while you fix those. Spend a few weeks learning which product, price and offer gets orders. That learning is what an agency would otherwise charge you to find out. If you sell on a marketplace, we cover that case in this post on new sellers.

Know what one order earns before you pay for traffic

Take a product sold at Rs 1,500. Say it costs Rs 450 to make, shipping is Rs 120, and payment fees and discounts take Rs 180. That leaves Rs 750 before advertising. This is an illustration, so use your own numbers. If you pay Rs 800 to win a customer, you lose money on the first order, whatever ROAS the report shows.

Agency fees add to this, and we break them down in what a digital marketing agency costs in India. Ask any agency to write your break-even cost per customer into the plan before the first campaign. If cash on delivery is part of your sales, ask for delivered orders next to placed orders, because orders refused at the door still show as sales in the ad report.

Match the help to the stage you are in

• Launched, orders are few: a small team that tests creatives, offers and pages, on a short scoped pilot instead of a long contract.
• Orders come, but you lose money: someone who works from your margin, shipping cost and returns, and who can tell you which products to stop advertising.
• Orders are fine, repeat buyers are few: retention work through email and WhatsApp, with fewer new ads.
• You also sell on Amazon, Flipkart or quick commerce: one team that watches your own site and the marketplaces together, so budget goes where the product earns most.

Five questions to ask before you sign

1. Which brands at my price point and stage have you worked with, and can I speak to one?
2. What will you ask me about margin, returns and cash on delivery before promising a ROAS?
3. Who will run my account, and will the ad account and Pixel be in my name?
4. What will you not do for me?
5. What does exit look like, and what do I keep: accounts, creatives and data?

A pilot tells you more than a pitch

Agree a 30 to 60 day scope with a fixed fee, a set number of creatives, weekly reports and the numbers you will judge it on. With low order volume the sales results will be noisy, so judge the work, the reporting and the questions the agency asks as much as the sales.

How our own fee is set

Revenue share: a fixed fee from Rs 25,000/month plus GST (half our usual rate) plus 5% to 10% of marketplace revenue, set per brand. It covers advertising on every platform you sell on, and additional services cost extra. For brands that sell mostly on their own site we use a monthly package instead. We do not do branding or social media management, so if you need a logo or a posting calendar first, hire for that separately.