Business models
The direct to consumer business model
The direct to consumer business model: you make your own product and sell it straight to customers, without shops in between. Cutting out retailers keeps more of the margin and gives you the customer relationship.
How it makes money
Cutting out retailers keeps more of the margin and gives you the customer relationship. In exchange, you have to pay for all your own marketing and delivery.
Real examples
- Warby Parker sold glasses online before opening its own shops.
- Dollar Shave Club sold razors by mail.
The numbers to watch
- Cost to win a customer
- Repeat purchases
- Margin after delivery and returns
Who it fits
Products with a clear story, where the middleman takes a big cut.
What goes wrong
Ad costs climb, and you compete with bigger brands for the same attention. It works best when customers come back.
Try it this week
Sell the first 20 by hand to people who are not your friends.
Then give it a time: one block of 90 minutes this week, in your calendar. Our playbooks have the next steps for finding your first customers.
Questions
What is an example of the direct to consumer model?
Warby Parker sold glasses online before opening its own shops.
What is the biggest risk with the direct to consumer model?
Ad costs climb, and you compete with bigger brands for the same attention.
Plan your first week of building it
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