In the US, direct-to-consumer (DTC) ecommerce sales for established brands will reach $186 billion this year.
Meanwhile, ecommerce as a whole continues to surge. Over the past two years, first-time orders to Shopify businesses grew by 33%, and returning shoppers increased by 59%. Brands aren’t just seeing new faces—they’re converting shoppers into loyal customers, too.
As brands shift to DTC models, they’re cutting out the wholesale and retail store intermediaries, and instead selling directly to the end customer. Here’s how you can do the same.
Table of contents
What is the direct-to-consumer sales model?
Direct-to-consumer (DTC) is when a brand or manufacturer sells its own products to its end customers. Key elements of the DTC sales model include:
- No intermediaries: Companies sell directly to consumers, not through third-party retailers.
- More control over branding: Companies have more control over how their products are presented, marketed, and shipped to consumers.
- Better customer data insights: Companies own all their customer data and can offer personalized marketing and product development.
- Higher profit margins: With no intermediary, companies can earn more profit from each sale.
The DTC retail model is growing in popularity because it brings brands closer to customers. DTC brands directly interact with customers, strengthening relationships.
Differences between traditional and direct-to-consumer sales
Retail
Retail is how products are sold to customers in stores or online. Stores will buy products from manufacturers or wholesalers, and then sell the products in their stores. Customers come to the stores to buy them.
In DTC, companies sell their products directly to customers, usually online. The entire customer experience relies on the brand, who can offer lower prices by eliminating markups. Many DTC brands have expanded by opening brick-and-mortar stores, like ThirdLove, the bra brand that now has stores in cities like Chicago, Boca Raton, and San Francisco.
Wholesale
A wholesale model is when producers sell their products in volume to a retailer. The retailer then acts as an intermediary by marketing and selling these products to consumers.
Here’s how wholesale and DTC retail models differ:
- Traditional wholesale/retail model: Manufacturer > wholesaler > distributor > retailer > end consumer
- DTC model: Manufacturer > advertising/website > end customer
Many brands now sell both DTC and wholesale. Alongside their direct consumer retail (online and in-store), The Conran Shop launched a dedicated B2B site powered by Shopify’s B2B commerce tools, targeted at trade customers like interior designers, architects, and other businesses.
In fact, brands using B2B on Shopify see up to a 33% increase in self-serve orders in just six months, and a 3.4 times increase in reorder frequency compared to DTC orders alone.
By unifying their B2B and B2C operations under one platform, The Conran Shop reduced the complexity of managing separate systems. With Shopify, The Conran Shop achieved:
- 50% reduction in total cost of ownership
- 54% increase in conversion rates
- 23% increase in email marketing revenue
Benefits of direct-to-consumer
What’s driving this shift toward DTC brands? A combination of benefits for both customers and brands.
Compete with established retail brands
DTC brands have a unique opportunity to stand out from the crowd. This is especially evident in high-growth verticals like apparel, health and beauty, and home and garden—consistently the top industries by order volume for businesses earning more than $1 million GMV on Shopify.
Free from retailers’ interpretations of their products, brands can get creative and showcase their individual values. DTC brands can also offer customers a full assortment line of products without being limited to what retailers believe are trending. Giving shoppers more choice can be a key way of driving them to your DTC site.
Control over distribution channels
Traditional retailers need to ship products to a wholesaler, who goes on to deliver them to the end consumer. The longer your supply chain, the more exposed you are to problems. One bump in the road causes delays for everyone down the line.
DTC retailers leave less risk exposed in their supply chain. Take a brand like Venus et Fleur, for example. The luxury flower brand could have relied on traditional retail channels, but it may have compromised the freshness and on-time delivery of its yearlong roses.
With a DTC approach, Venus et Fleur unified their inventory management and shipping to ensure each bouquet arrives exactly how and when customers expect it. The brand minimized costly supply chain issues while driving higher average order values and greater customer loyalty.
Retail stores are in complete control over where they place your products, too. What might sound like a small difference can have a huge impact on revenue. In one study, a product saw a 25% dip in sales when placed on a less visible shelf.
Experiment and get customer feedback
Selling directly to the consumer means you have eyes all over the customer journey, from start to finish. You’ll understand why they’re purchasing (and how)—insight that would’ve gotten lost if those products were sold through traditional retail strategies.
With data from your customers, you can make optimizations to your business like:
- Catering to consumers’ requests for a wider range of products
- Optimizing site visuals for mobile, since mobile traffic accounts for half of all store visits
- Running A/B tests on landing pages and creative messaging to see which consumers respond to best
Having this insight into a consumer’s experience with your product means you’ll develop and iterate faster. You’ll know the stumbling blocks and demands from customers without having to battle each retailer for access to customer data.
Ability to personalize customer experience
Personalization goes a long way. Some 50% of consumers say personalized offers and promotions improve their shopping experience, meaning brands that leverage first-party data typically see higher conversions and repeat business. Without the limitations of big-box retailers, DTC brands can shine at providing customers with personalized experiences.
Brands like MIzzen+Main can offer personalized experiences through their unified customer profiles, which gives in-store staff and marketers visibility in purchase history, interactions, and preferences. "Our retail employees can go into a customer's account created online and see how many loyalty points they have and then apply their credits to their account," says Natalie Shaddick, VP of ecommerce at Mizzen+Main. “That would be very difficult to achieve if we didn’t have Shopify for both ecommerce and POS.”
The brand’s synchronized cross-channel promotions create a consistent customer experience, contributing to strong growth with 27% increased retail revenue and 15% online revenue growth year-over-year in 2023.
Boost margins without increasing the price
Direct-to-consumer companies don’t have to make cuts to their profit margins. There’s no retailer, wholesaler, or marketplace claiming their fair share of a product’s retail price.
DTC brands can also reduce their CAPEX or commercial rent costs. They don’t always need to rent costly physical retail spaces to increase growth. Because of this extra profitability baked into each item, DTC brands can sell their products at a lower cost through their owned channels.
Pitfalls to avoid when going DTC
Here are five common traps to avoid when launching and scaling a DTC business:
- Insufficient market research and understanding: Many DTC businesses fall into the trap of not thoroughly researching their target market and understanding customer needs. This can lead to ineffective marketing strategies, misaligned product offerings, and ultimately, lower sales. Conduct in-depth market research to identify your target customers, their preferences, and their pain points to create products and services that genuinely cater to their needs.
- Poor brand differentiation: The DTC space is highly competitive, and new businesses often struggle to differentiate themselves from competitors. Focus on creating a unique value proposition and brand identity. Communicate this message consistently across all channels to establish a strong, memorable brand that sets you apart from the competition.
- Over-reliance on paid marketing: Many DTC businesses become overly reliant on paid marketing channels, such as social media ads and Google Ads, to drive traffic and sales. While these channels can be effective, they can also be costly and result in diminishing returns. Diversify your marketing strategy and invest in organic growth channels such as SEO, content marketing, and email marketing to build long-term customer relationships and a sustainable acquisition strategy.
- Neglecting customer experience and retention: It's easy to get caught up in acquiring new customers, but don't forget the importance of retaining existing ones. Invest in the customer experience, from the quality of your products to the support and service provided. Create customer feedback loops, address issues promptly, and offer personalized experiences to encourage repeat purchases and positive word of mouth.
- Inefficient operations and supply chain management: As DTC businesses scale, supply chain management becomes increasingly complex. Invest in the right systems and processes to manage inventory, order fulfillment, and shipping effectively. Ensure you have the infrastructure in place to handle increased demand, and consider partnering with trusted third-party logistics (3PL) providers to streamline your supply chain and maintain high service levels.
Eight direct to consumer brand examples
Here are eight examples of DTC brands disrupting the market.
1. Allbirds
DTC pioneer Allbirds grew a loyal digital fanbase using Shopify before trying out a popup shop. That first popup opened the way for a global retail presence consisting of 60 stores and counting.
A value-driven DTC brand, they appeal to an environmentally conscious audience. Allbirds practices what they preach when it comes to sustainability, too. Travis Boyce, Allbirds’ vice president of marketing, explains that sustainability has always been at the core of the business, and that the brand takes all the steps it can to offset its impact.
“So for us, it’s our products, it’s our headquarters, it’s our stores, it’s the commutes to work,” he says. “Everything is our impact from a carbon standpoint. And we want to measure that.… We completely offset it 100% so that we are carbon neutral. And then it only matters if you offset it if you start to work to reduce it. So we are constantly looking at ways to reduce our impact from a carbon footprint standpoint across every aspect of our business.”
2. Lovevery
Customers often like the novelty of receiving curated product selections, or the convenience of receiving replenishment items.
Providing customers with subscriptions can be an effective way for DTC brands to increase customer retention and bring in monthly recurring revenue.
Shopify-based Lovevery is a DTC subscription brand for kids’ toys. Roderick Morris cofounded Lovevery to offer parents a subscription-based package of toys that evolve with children as they grow.
Retailers often use subscription models for replenishment items like food and beverages or personal care items. But Lovevery has a different approach. They aim to accompany children as they grow, providing what they need as they develop. Roderick gives an excellent description of how this works.
“The child is constantly evolving, and the parents’ needs are evolving, too,” he says. “That’s different from a razor subscription, for example, where I’m getting the same razor every six weeks, and my fundamental need to shave my beard is not changing from month to month. With a baby, what they need is fundamentally different three months later than at a particular point in time, than with a toddler.”
This approach to accompanying parents’ and children’s changing needs helps Lovevery retain customers for many years.
“Our customers often stay with us for three or more years,” Roderick says. “The most popular play kit is the one for newborns—more than 20% of our customers start there. After a year of subscribing, more than 70% of these customers are still active. After two years, more than 50% are still active.”
3. Bombas
Shopify-based Bombas began their DTC journey selling socks. Driven by social causes, the company’s founders insisted that for every pair of socks they sold, they would donate another pair to someone affected by homelessness.
Thanks to their motto “Comfort is everything,” Bombas has attracted a niche following and has since branched out to sell other products like underwear, t-shirts, and slippers.
4. CoverGirl
Historically, cosmetics brand CoverGirl had only sold at big-box distributors and online marketplaces—but by leveraging existing celebrity endorsements, they were able to experiment with DTC quickly. With the help of 1 Rockwell, the company launched their ecommerce website in just four weeks.
CoverGirl is also an example of a DTC brand that has maintained retail partnerships while selling to consumers via their website. At the time of their shift to DTC, chief marketing officer Ukonwa Ojo had this to say about the decision:
“We actually see it as a great place for learning, to make the traditional retail work harder. Now, we can go to our retail partners with insights, and say, ‘These are the products that are doing particularly well,’ or ‘Here's some technologies that you can bring into your store to elevate the shopping experience.’”
5. Scentbird
Scentbird is a fragrance subscription service that lets members try new fragrances with each shipment. They provide a wide selection of both designer and niche brands for subscribers to try.
Starting at just $14.95 per month, it’s an affordable way for subscribers to try scents without going in-store for a sample or purchasing a full bottle.
Tapping into consumer desire for personalization and high-quality customer service, Scentbird has a dedicated team of fragrance experts who help subscribers find the right scent for any occasion. Founder Mariya Nurislamova explains that Scentbird makes it easy for consumers to try out perfumes without making a larger commitment.
“We help consumers ‘date’ fragrances before marrying them by shipping 30-day supplies of high-end perfume to people’s homes,” she says.
6. The Honest Company
Some of the most successful DTCs are created to solve a common customer problem. Launched by Hollywood actor Jessica Alba, The Honest Company sells safe, eco-friendly, and affordable child care products.
Alba had become frustrated at how difficult it was to find products that met her standards. The brand’s well-defined mission and strong social media community helped them attain unicorn status in 2015.
7. Glossier
Glossier is a beauty and skincare brand founded by Emily Weiss in 2014, emerging from her popular beauty blog, Into The Gloss.
Through this blog, they built a community of readers who shared their thoughts on beauty products. The company then used this feedback to develop their products and packaging. By involving customers in these decisions, Glossier made people feel like they were part of the brand, which helped the company grow quickly.
8. Harry’s
When razor subscription brand Harry’s launched in 2013, they moved into a heavily dominated and crowded marketplace—Gillette owned 66.3% of the market share.
But Harry’s understood and tapped into the power of referral marketing. Cofounder and CEO Jeff Raider explains that credible referrals were the driving force behind the brand.
“The idea for our campaign was built around our belief that the most powerful and effective way to be introduced to our new company was through a credible referral,” he says. “Thus, we focused on building a campaign that helped people to spread the word to their friends.”
Tips for DTC sales
Before you get started with DTC selling, it’s important to consider whether it’s the right approach for your brand.
Consider these seven points before you commit to launching your DTC strategy.
1. Build a reputation
While selling directly to the consumer does have its benefits, online retailers need to know that their reputation is everything. Traditional consumer packaged goods (CPG) companies have the luxury of marketplaces and big-box retailers dealing with the customer purchasing experience. Paul Wyber, founder of Gerry’s, explains how DTC brands need to approach customer experience.
“DTC brands need to ensure their customers have the best possible purchasing experience from start to finish. This includes things like ensuring the website, all the way down to the goods the consumer receives in the mail, are all without issues. As it is, your brand reputation is on the line throughout this whole process.
“Brands need to ensure they have processes in place when their customer experiences fall short of expectations or if things go wrong, because they can and will.”
2. Consider fulfillment costs
Instead of bulk distribution, DTC needs one-off, last-mile delivery. You’ll need to choose between fulfilling online orders yourself or partnering with retailers to fulfill orders. The latter option is often best if you’re experimenting with DTC.
DTC brands also need to consider:
- Outsourcing shipping and logistics to third parties
- Creating and sourcing DTC packaging
- Shipping costs, and whether you ship for free
- How to accept returns
A big concern for digital-only DTC companies is returns. In 2024, retail merchandise returned in the United States totaled $890 billion, which represents a 16.9% return rate.
Return rates for online shops are usually higher than for their physical store peers. To better manage them, DTC companies may need to integrate a returns-management system with their enterprise resource planning (ERP), third-party logistics (3PL) partner, or inventory management system (IMS).
3. Build a community
Social media is considered one of the top channels for DTC customer acquisition. Online communities are niche groups of people with a shared interest. It’s not just subreddits powering the bulk of online communities, though—DTC brands are building their own communities to increase brand loyalty.
Communities increase customer retention and brand awareness, and decrease customer support costs.
It’s no surprise then that global brands are creating new ways, like community hubs, for customers to interact with them. When asked about the power of community-building, Kimberly Smith, member of the National Retail Federation board of directors, says communities are replacing traditional marketing strategies.
“Some brands have yet to even explore digital marketing or paid advertising because their community is so strong,” she says. “They spend so much time [building] it that it drives the direct-to-consumer revenue.”
DTC skincare brand Curology has a private members group on Facebook with around 16,000 members. The brand encourages members to share before and after results of using their products, and skincare tips.
4. Source customer data ethically to build trust
Customers are increasingly concerned with how brands use and handle their data. To obtain valuable customer data, DTC brands need to respect customer boundaries. That could mean:
- Making it easy for shoppers to opt out of cookies
- Letting shoppers unsubscribe from email campaigns easily
- Allowing customers to check out as a guest
- Asking customers to opt in
Be clear on how you’ll use customers’ first-party data. When customers understand how their data improves their shopping experience through personalized recommendations, seamless omnichannel experiences, or exclusive benefits, they're more likely to share information willingly.
5. Invest in niche channels to reach your target audience
As mainstream platforms like Instagram get crowded, DTC brands can reach target audiences on upcoming, niche digital channels instead.
Doe Lashes, a cruelty-free lash brand, shares content on Discord, a popular group-chat platform among gamers that attracts consumers in the same age bracket as Doe’s. And on the apartment design game Design Home, players can purchase physical versions of products in their virtual apartments.
6. Diversify offerings
To keep shoppers interested in product offerings beyond an initial purchase, DTC brands need to expand beyond their initial hero offerings. Some examples include footwear brand Allbirds selling apparel, and men’s razor company Harry’s launching a deodorant range.
It’s also important to avoid overwhelming customers and setting them up for “analysis paralysis.”
Kate MacCabe, vice president of product at Brooklinen, says that the bedding company has actually benefited from limiting consumers’ customizations, streamlining the path to purchase in the process.
7. Get the right tech stack
Choosing the right commerce platform can impact your direct-to-consumer strategy, especially as your scale. A platform built for unified commerce simplifies operations by tying together all the pieces you need to sell across channels, regions, and even business models like DTC and B2B.
Shopify is widely known as the market leader in DTC commerce. Its intuitive interface, extensive app ecosystem, and reputation for helping brands launch and scale make it a go-to choice for many consumer-focused businesses.
Shopify helps you understand both your retail and wholesale customers better by keeping all your data in one place. You can see how people shop, what sells best, and how customers interact with your business across all your sales channels. This helps you make smarter decisions about marketing, customer support, and creating new products.
Our ever-growing suite of features and integrations adapts to different markets, sales channels, and customer segments.
- Shop Campaigns: Shop Campaigns is driving up to 24% new customer growth for brands. It helps you find new customers through the Shop app (150 million users) and platforms like Meta and Google. You only pay when someone buys something. The platform handles the creative work, audience targeting, and where your ads appear, so you can launch campaigns quickly.
- Shopify Audiences: Audiencesuses shopping data from across Shopify's platform to help you find customers who are most likely to buy from your store. It works with major platforms like Meta, Google, and TikTok, and can cut your customer acquisition costs by up to 50% while doubling your success with repeat customer ads.
- Segmentation: Segmentationhelps you sort customers into different groups based on how they shop, where they live, and what they like to buy. The groups update on their own whenever customers make changes, or new people shop at your store. You can then use these groups to send special deals and emails to the right customers at the right time.
- Managed Markets: Shopify Managed Marketsmakes selling internationally easier by handling all the complex parts of global selling for you. It manages everything from shipping rates and local payment methods to taxes and customs paperwork, so you can sell to customers in over 150 countries without any hassle.
Whether adding a B2B portal or launching a new product line, Shopify lets you do it all within a single platform, at a 22% lower overall TCO on average.
You don’t have to be DTC only
There’s no doubt that selling directly to the consumer has its advantages. You’re not paying a huge cut to big-box retailers or sacrificing profit margins by selling to wholesalers. You also get higher customer satisfaction and more customers on your own site.
However, don’t feel like your choices are DTC or nothing. Legacy brands like Nike have demonstrated how to dip your toe into the DTC world without sacrificing retail partnerships. More brands are going DTC-first—not DTC-only.
Test the waters by creating digitally native sectors of your brand. Own your customer experience—and convince them to purchase from your ecommerce store repeatedly.
Read more
- Craft a Winning D2C Ecommerce Strategy: A Step-by-Step Guide
- The Complete Guide to Direct-to-Consumer (DTC) Marketing
- B2B Marketplaces: Top 6 Wholesale Marketplaces to Find Buyers
- Understanding the B2B Buying Process: The Key Factors and Stages That Affect B2B Decisions
- B2B Ecommerce Features: An 8-Point Checklist for Wholesalers
- Wholesale Ecommerce: How It Works, Types, and Benefits to Wholesalers
- How to Become a Wholesale Distributor in 2025
- D2C Manufacturing: Benefits, Challenges, How To Succeed
- B2B Self-Service Is Your Hands-Free Sales Channel
- Why Manufacturers Should Invest in B2B Ecommerce Today
DTC sales FAQ
What is DTC ecommerce?
DTC (direct-to-consumer) ecommerce is a business model where companies sell their products or services directly to customers, bypassing traditional retail channels like brick-and-mortar stores or third-party platforms. It enables businesses to have greater control over their brand, customer data, and marketing efforts.
Are DTC and ecommerce the same?
DTC and ecommerce are not the same, though they are related. Ecommerce refers to the broader concept of buying and selling goods or services online, while DTC is a specific ecommerce model that focuses on direct, online sales from manufacturers or brands to consumers.
Is Amazon considered DTC?
Amazon is not considered a DTC company, as it is primarily an online marketplace that connects buyers with various sellers, including traditional retailers, small businesses, and DTC brands. Amazon acts as a third-party intermediary rather than selling products directly to consumers from its own inventory.
What is the difference between DTC and D2C?
There is no difference between DTC and D2C; they are simply different abbreviations for the same concept: direct-to-consumer.
