Direct-to-Consumer (DTC) Sales: Definition, Benefits, and Tips (2026)

Direct-to-consumer (DTC) ecommerce sales in the US accounted for $239.75 billion last year. That’s roughly 19% of total retail sales.

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 direct-to-consumer 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, with tips on how to increase direct-to-consumer sales.

What are direct-to-consumer sales?

Direct-to-consumer sales is when a brand or manufacturer sells its own products to its end customers. Key elements of the DTC sales model include:

• No intermediaries: Brands 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: Brands 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. 

Differences between retail, wholesale, and DTC

The DTC retail model is growing in popularity because it brings brands closer to customers. DTC brands directly interact with shoppers, strengthening customer relationships. 

Here’s how it compares to other sales channels:

Retail model

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 direct-to-consumer sales, 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 and San Francisco. It’s also common for DTC brands to open popup shops or other types of experiential marketing to test out in-person selling.

Wholesale model

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. 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.

How the DTC sales model works

Here’s a brief overview of how DTC sales work.

1. Pick your primary DTC channel mix

Ecommerce websites tend to get the most praise for DTC brands. They offer greater ownership of customer data and higher profit margins when there’s no intermediary to take a cut. 

That said, it’s not the only way to sell directly to your customers. Your DTC channel mix might also include:

• Social commerce: Social media channels like TikTok and Instagram have native shopping features that let customers discover, browse, and purchase products without leaving the app. TikTok Shop is a particularly lucrative channel. It accounted for 20% of all social commerce sales in 2025, with revenue projected to exceed $28.56 billion by 2027.
• Retail expansion: Get face time with your customers and strengthen relationships through permanent stores or temporary popups. Bain expects these retail sales to grow 3.5% this year.
• Mobile apps: Mobile devices account for 78% of all retail website traffic and 70% of orders. Capitalize on this with your own mobile app, which opens the door to a new direct marketing channel: push notifications.

Other channels like ecommerce marketplaces can also play a role. While they don’t fall under the DTC sales umbrella, they can complement your strategy. Listing your products on the marketplace—alongside your DTC channels—can tap into that huge audience without becoming overreliant on a channel you don’t own.

2. Build the data loop: First-party data capture → segmentation → retention

Access to customer data is a valuable tool for DTC retailers, but it’s getting more difficult to obtain. Browsers like Google are giving users greater privacy controls. They can easily opt out of cookie tracking—the technology DTC brands previously relied on to uncover customer data.

First-party data is the solution. Collected through channels you own, such as your website or retail stores, first-party data sheds light on your customers, including:

• Items they’ve viewed
• Products they’ve bought
• Dollars they’ve spent 
• Marketing campaigns they’ve engaged with
• Loyalty rewards they’ve redeemed

Use this data to create customer segments based on qualities they share. These act as the foundation for personalized outreach that keep buyers within your DTC sales sphere.

For instance, you might have a segment of VIP buyers who’ve spent more than $500 with your brand. Give them special treatment: invite them to popup events, give exclusive access to new product drops, and offer free shipping for the next year to encourage their loyalty. 

💡Tip: Shopify merchants have a customer data platform (CDP) by default. Any first-party data you collect feeds back to an individual customer’s unified profile. Use this to create segments that power personalized campaigns that update in real time as customer behavior changes. 

3. Establish your operational backbone

The lucrative profit margins DTC sales offer attract brands who want to squeeze the most revenue out of every customer they’ve acquired. But retailers don’t always account for the operational infrastructure required to meet customers’ DTC shopping expectations.

Omnichannel is the new norm. Shoppers use a combination of channels in a single purchase decision, and they expect the experience to be seamless as they switch.

The old method was a combination of patchy integrations built on top of a platform that only supported a single channel. Unified commerce is the next evolution. It brings together sales, inventory, and order data wherever you sell, to not only meet customer expectations, but maintain operational efficiency as you grow. 

This approach supports:

• Omnichannel fulfillment such as buy online, pick up in-store (BOPIS)
• Loyalty programs that reward customers wherever they shop 
• Intelligent inventory management by moving stock to sales channels with higher demand

Benefits of direct-to-consumer sales

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 strategy to get them to visit 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 they may have compromised the freshness and on-time delivery of their yearlong roses. 

With a direct-to-consumer 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 (AOV) and greater customer loyalty.

When other retail stores sell your products, they are in complete control over where they place your products. What might sound like a small difference can have a huge impact on revenue. 

Experiment and get customer feedback

Direct-to-consumer selling 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 direct-to-consumer 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 what 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 64% of consumers say personalized offers are important, 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.

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 capital expenditures (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 selling DTC

Here are common traps to avoid when launching and scaling a DTC business: 

Over-spending on acquisition without retention math

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. 

Use customer lifetime value (CLV) to influence how much you spend on customer acquisition. If the average customer only brings in $50 but you’re spending $55 to acquire them, for example, you’re losing money in the long term. 

Combine this with a customer retention strategy that boosts CLV and keeps existing customers in your sphere of influence. Create customer feedback loops, address issues promptly, and offer personalized experiences to encourage repeat purchases and positive word of mouth.

Underestimating returns and reverse logistics

As DTC businesses scale, supply chain management becomes increasingly complex. Invest in the right systems and processes to manage inventory, order fulfillment, shipping, and returns 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. These partners can also help with reverse logistics and reduce the operational burden of processing the 19.3% of orders that are returned, on average.

Weak delivery promises and customer trust breakdowns

If something goes wrong during the customer’s experience when they buy directly, there’s nowhere to hide. You can’t blame a marketplace fulfillment team or a retail partner’s slip up. The onus is on you to deliver a superior customer experience and patch things up when it goes wrong. 

Take weak delivery promises, for instance. McKinsey reports customers are more willing to compromise on delivery speed for assurance that their order will arrive within the promised delivery window. Fail to meet this expectation and customer trust can break down. 

You need to perfect the experience—through speedy fulfillment, order-tracking transparency, and diversifying shipping carriers—to prevent delays. If the worst does happen, recover the bad service by reaching out with a genuine apology and solution, like a free replacement for an item lost in transit. 

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 practice 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 they can to offset their environmental 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

Providing customers with subscriptions can be an effective way for DTC brands to increase customer retention and bring in monthly recurring revenue. Customers often like the novelty of receiving curated product selections or the convenience of receiving replenishment items. 

Shopify retailer 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,” Roderick 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 apparel retailer 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.

With 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 quiz to help customers find their perfect scent. It even 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”—a valuation over $1billion—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 to increase 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 points before you commit to launching your DTC strategy. 

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,” he says. “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.” 

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 2025, retail merchandise returned in the United States totaled $850 billion, which represents a 19.3% return rate.

Return rates for online shops are usually higher than for their physical store peers. To better manage them, ecommerce 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). 

Build a community

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. 

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 15,000 members. The brand encourages members to share before and after results of using their products, as well as skincare tips.

Curology also shares user-generated content (UGC) from the community on their Instagram account:

View this post on Instagram

A post shared by Curology: Custom Skincare (@curology)

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 and meet data compliance regulations. 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 to communications

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.

Invest in niche channels to reach your target audience

As mainstream platforms like Instagram get crowded, DTC brands can reach target audiences on up-and-coming, niche digital channels instead. 

Take Doe Lashes, a cruelty-free lash brand, that shares content on Discord, a popular group-chat platform among gamers that attracts consumers in the same age bracket as Doe’s.

Diversify offerings

To keep shoppers interested in product offerings beyond the first 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. 

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 a market leader in DTC commerce. Its intuitive interface, extensive app ecosystem, and reputation for helping brands launch and scale make Shopify 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.

Shopify’s ever-growing suite of features and integrations adapts to different markets, sales channels, and customer segments:

Shop Campaigns

Shop Campaigns can drive up to 24% new customer growth for brands. This tool helps you find new customers through the Shop app—a network of more than 150 million shoppers—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

Shopify Audiences uses 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 (CAC) by up to 50% while doubling your success with repeat customer ads.

Segmentation

Segmentation helps 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 Markets makes 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 total cost of ownership (TCO) on average.

You don’t have to be DTC only

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. 

When hybrid wins: DTC-first, not DTC-only

More brands are going DTC-first—not DTC-only—to balance the disadvantages of selling direct. For example: 

• Marketplaces have a huge native customer base. Over two-thirds of shoppers purchased from one in the last year, with 20% starting their search for a new product on a marketplace platform.
• Wholesale partnerships can improve cash flow with bulk orders while simultaneously increasing your physical footprint—without being tied to a physical store you operate. 

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.