Recently, the viability VC investments in direct-to-consumer (D2C) companies has been called into question. We unpack the D2C business model and share our evaluation criteria for investments.
Think DTC might be even simpler: bunch of companies invested margin that traditionally went into retailers (some 30-40%) and took 20% of the RRP price, gave 20% to the likes of Google/Facebook. Essentially it was rethinking distribution through retailers and reworking it to be price + through cheap channels.
Google/Facebook being auction ad markets meant the second those companies got competitors they would bid away their margin quickly.