Reinventing the Direct-to-Consumer Business Model

(1) Viable business model - can you make decent profits on the unit economics? (note: this means that DTC winners will, by and large, be premium-priced, with decent basket sizes, with efficient cost structures, and have repeat business with a customer rather than just one-off transactions)

There are several big trends impacting consumer brands. New brands like Dollar Shave Club that are skipping traditional retail and building their own relationships with consumers are threatening traditional brands in categories they never thought possible. At the same time, while brands need to sell through Amazon because of its reach with consumer

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A lot of DTC brands, across categories, adopted “reviving the middle” strategy in the form of good quality items at affordable prices and excellent service. The downside of this model is that it’s costly, and most of these brands emulating it are VC-funded and not yet profitable. Scaling this model is also a challenge, as costs of supply, productio... See more

Many early DTC companies that got big quickly contracted out the manufacturing of the physical products they were branding and selling. But that didn’t serve them well in the long run.