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D2C

D2C

Direct-to-consumer - a model of sales where companies sell directly to consumers (B2C) in industries where traditionally sales would be done via other distribution channels like retailers, resellers, etc.

Direct-to-Consumer (D2C), is a business model in which manufacturers and Consumer Packaged Goods (CPG) companies sell directly to their consumers, as opposed to pipelining through wholesalers to retailers and then to consumers.

D2C business is highly beneficial when it comes to consumers. Consumers can purchase their desired goods at lower costs because it is manufacturer direct. Additionally, manufacturers can cut costs by removing the third-party "middle-men" responsible for the wholesale and retail sale of their goods. Although there are many reasons to strive to be a D2C corporation, there are many reasons companies do not make the transition, one of them being competition.

When a manufacturer makes the shift from B2B2C or Business-to-Business-to-Consumer, to D2C they suddenly begin competing with the retailers that once supplied their products to consumers. This means the company needs to start better understanding their customer, which is advantageous, to promote repeat business. Due to the difficulty of the transition to D2C, many manufacturers opt for a hybrid business model that empowers them to continue to sell to distributors while also distributing directly to their consumers as well. This method reduces risks while still providing many of the major benefits such as cost reduction and understanding the consumer market.

Timeline

Further Resources

Title
Author
Link
Type
Date

COVID-19 Case Study 2020: New Direct-to-Consumer (D2C) Opportunities During Lockdown - ResearchAndMarkets.com

Web

July 1, 2020

How to Launch a D2C Brand (ft. the founders of Made.com/Typology, Ho Karan & Le Slip Français)

Web

August 1, 2019

Scaling a D2C Startup through Organic Growth // Helena Price Hambrecht, Haus (Design Driven NYC)

Web

February 26, 2020

The Rise of D2C

Vivian Wagner

Web

November 18, 2019

News

Title
Author
Date
Publisher
Description
Connie Loizos
September 1, 2021
TechCrunch
Bright Cellars, a six-year-old, Milwaukee, Wis.-based subscription-based wine seller has, like many upstarts, evolved over time. While it once sent its club members third-party wines that fit their particular profiles, Bright Cellars says it's now amassing enough data about its customers through its "palate" quizzes that it no longer sells wines made by other brands. [...]
Alex Wilhelm
August 25, 2021
TechCrunch
Warby Parker has two main sales channels, largely attractive economics, falling losses and rising adjusted profitability. You could even argue it handled the pandemic well. So what's it worth?
Meha Agarwal
July 21, 2021
YourStory.com
D2C lifestyle brand Zouk has big plans after its pre-Series A fundraise of $1.5 million. It aims to scale to Rs 100 crore by FY23, expand in India, and start operations in the US, Canada, Europe, and the Middle East.
Saumya Tewari
July 5, 2021
mint
Launched in 2015, Sugar Cosmetics clocked over Rs130 crore in revenue in FY21. The company currently offers over 550 products in makeup and skincare verticals
Saumya Tewari, Suneera Tandon
June 30, 2021
mint
Drawn to quality and customization, affluent Indian consumers are falling in love with direct-to-consumer brands.India has a growing young and upwardly mobile population which seeks niche, high-quality and customized products that are underserved by the traditional players
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