Customers don't care if it's D2C. They care about price, quality and convenience. The real draw of D2C is subscription shopping. I don't have to buy the same thing repeatedly, it just shows up at my door. Amazon offers this.

@seeleunit2000

2 ай бұрын

Yeah pretty much.

@nosaj2001

2 ай бұрын

Yet what general customers are ignorant of is- Amazon mainly takes products from global businesses and makes them flog them cheaply so they don't get cogs (cost of goods) back and even lose on them. What this means for the nieve customer is once all those businesses are DEAD- very little to NO PRODUCTS or choice will be available for consumers again. AMAZON IS A LIE!!

@GX-105D

2 ай бұрын

so does walmart

@skierpage

2 ай бұрын

I'm happy to buy then try glasses or a mattress from an online company if it gives me some reason to think their product has exceptional quality and value for the price. The problem is people have no need for a subscription service for glasses, mattresses, luggage, shoes, etc. So the company has to make back that $70 customer acquisition cost on one sale, because it's going to be a a year or more before they make a repeat sale to me.

@sd-ch2cq

2 ай бұрын

I don't want subscriptions: the products never come in a frequency that works well for me. Always either too much or too little.

Plot twist… theses direct to consumer wasn’t cheaper

@keithjackson2035

2 ай бұрын

Facts!

@12012channel

2 ай бұрын

In fact, more expensive and lower quality.D2C is basically just a marketing gimmick.

@carlostavaresjr958

2 ай бұрын

Facts!

@Cringe_department_15

2 ай бұрын

Omg guys he referenced a old popular tv show he is so funny give him likes🤣🤣🤣🤣😂

@sd-ch2cq

2 ай бұрын

Fact! (There are a few exceptions, but they are far and few between)

Birkenstock is not a native DTC brand. It was “founded” more than 250 years ago. And Chewy is e-commerce, yes, but it’s a retailer, not a brand.

@khalidcarrillo1132

2 ай бұрын

I can find Birkenstock at many retailers, not sure why it is considered DTC at all.

@edwardchester1

2 ай бұрын

Same with Yeti, right? Not being old but being a brand that has long been in wider retail avenues.

It’s funny how they say they cut out the middleman when in reality they traded one middleman for another, the tech companies. Once they realized how entirely dependent they were on online marketing they took advantage and skyrocketed rates. And who ends up carrying the brunt of those costs? The consumers, leaving us with a crappier experience.

@champagneflowers8522

2 ай бұрын

yupp it was manipulation from the heavies, so they could create an epic rug pull

@RogueBagel

2 ай бұрын

D2C cuts both ways: the products/brands seem exclusive/revolutionary by *not* following the traditional retail model, but then when those products move to standard retail (think Harry's @ Target) they seem like "sellouts" or "ordinary" by sharing shelf space with competing products.

@harpsealSF

2 ай бұрын

Advertising channels aren't really middlemen, they are more like "sidemen" lol. They are a channel through which you create brand awareness, but they aren't a direct part of the goods changing hands transaction in the same way as a distributor, or brick-and-mortar store. Now if you have the purchase transaction actually happen on FB, with a Buy button or something, then they become a middleman, and also usually get a percentage cut.

@onemorechris

13 күн бұрын

100% the middle man was, in many cases, just one man; mark.

I was into DTC and supportive, but now I have stopped buying altogether because the products have been ridiculously overpriced garbage. I bought jewelry that turned my skin green (Bryan Anthony), nail polish that destroyed my fingernails and did nothing it advertised (Static Nails), the Our Place pan where the nonstick coating wears off after a year, and more…. Consumer trust is gone and I’m done. I’m back to big companies that I know.

@12012channel

2 ай бұрын

Just hearsay but I heard a lot of it isn't actually D2C but rebranded DHGate stuff

@khalidcarrillo1132

2 ай бұрын

Mostly imported crap just rebranded.

@speedracer2please

2 ай бұрын

I'd like to contribute my DTC wristwatch startups to the list. They're mostly rebranded from watches you can order way cheaper from China, and you get way better quality for way less from established "cheap" companies like Casio and Timex.

@CheesyAceGameplay

21 күн бұрын

Dude this. Fr fr.

That cut to "WORLD DOMINATION" at 0:35 made me choke on my trailmix lol. We really are living in Black Mirror

@nickg1601

2 ай бұрын

So true. imagine if a company like Disney said that. It's only facetious because we know it isn't true.... for that company random company

@aekaydubs

2 ай бұрын

Same. I groaned and rolled my eyes so hard my kid asked if I was okay

@TheDunningKrugerEffectisReal

2 ай бұрын

My pubes fell out from stress hearing that not gonna lie.

@summaryjudgment

2 ай бұрын

Lol, I'm drinking my coffee and had a "did she really just say that out loud?" moment. Maybe world domination is code for bankruptcy?

@jamessuper47

2 ай бұрын

It's chapter 2

Warby Parker CEO: The optical industry has some 'structural dynamics' that allows to sell products for a fraction of the price of other goods in our category... Translation: Luxxotica has been ripping off customers for decades and has a monopoly on eyewear brands, retailers and opticians...

@TheJttv

2 ай бұрын

All my homies hate luxottica

@flixnet2600

2 ай бұрын

Warby Parker isn’t any better

@Corgiking521

2 ай бұрын

Not a rip off if there is customer demand to buy their products. They’ll sell glasses for whatever so chump is willing to pay. Plenty of people who spend $200 on ray bans.

@paulkatz2483

2 ай бұрын

​@@Corgiking521that's fine so long as those high prices are resilient in a competitive environment. If one producer controls the vast majority of the brands behind the scenes, then it becomes problematic.

@AI_Taylor

2 ай бұрын

Eyebuydirect is cheaper and has brand name glasses

It's nice to know I'm not crazy, and that completely unprofitable brands with no reasonable plan to get profitable do actually fail.

@Tential1

2 ай бұрын

They do. People just like to pretend it's all broken and cry. They have a strong survivorship bias. Investors get wiped out every day on these dumb Investments. People focus on Amazon, etc. And forget, there were literally a thousand+ tries to get that Amazon. People lost billions gambling on startups, failing, until Amazon won. If it was so broken, you'd see these people wanting to put their money in, but they never do, they just complain. Because in reality, they don't get it, it just feels good to whine with the crowd.

Just because you’re removing “the middleman,” that doesn’t mean distribution costs magically cease to exist. Even if gross margins are better, much of that is offset by higher customer acquisition costs. Considering that mattresses are probably the most infrequent purchases one makes, they are virtually impossible to recoup in future sales. Amazons, Walmarts, etc. of the world have it down to a science and can do it with unmatched economies of scale.

@P2B_JC

Ай бұрын

That's why auto manufacturers want car dealerships around, and why Tesla's model is a gimmick.

As someone who watches things on KZread, I’ve seen a lot of d2c marketing. Raycons, Magic Spoon, Factor and so so so many others “sponsoring” videos. I’ve grown to HATE d2c companies because it’s so pervasive. If I watch 7 videos made at around the same time, I’m going to see 7 people who didn’t, don’t, and wouldn’t pay for Magic Spoon try to convince me to buy it. And if I’m interested, I’ll try a direct competitor first.

@vandogtrailer6701

2 ай бұрын

KZread Premium is the best monthly subscription I've added in years, just to avoid those ads.

@lmshanyfelt

2 ай бұрын

I finally tried Magic Spoon, because it's now available through Kroger. Plus it was on sale with a coupon. If my grocer didn't have it, I'd never have had a spoonful.

@sd-ch2cq

2 ай бұрын

If anything that oversaturation is turning me off their brands (and of the KZreadrs who push the brand): a good product doesn't need an avalanche of advertisement. HelloFresh/Factor must taste terrible if it needs that many KZreadrs pretending to like it.

@kvnxyz

2 ай бұрын

@@sd-ch2cqspot on man, been thinking the same lately, “why all these products needs crazy promotion if they are that good” and from a birds eye view, this is thing with every industry.

@mlsasd6494

8 күн бұрын

@@sd-ch2cq does not taste terrible, its just pretty expensive after the onboarding price and risky (one box i had a moldy ingredient, one box shipping was late by a day melting the ice packs).

Chewy isn’t really a D to C… they are a reseller of other brands (similar to Amazon).

@mattsch21

2 ай бұрын

It's an embarrassing miscategorization tbh.

@shawnsg

2 ай бұрын

Depends on how you define DTC.

@harpsealSF

2 ай бұрын

@@shawnsg well, if you define if completely incorrectly I guess that would be true. e-commerce does NOT equal DTC.

@shawnsg

2 ай бұрын

@@harpsealSF Direct-to-consumer doesn't have a legal protected formal definition. If it does, please share your source. Direct-to-consumer isn't a new concept though. It's loosely centered around skipping an intermediary. The term took off in the 90's referencing advertising drugs to consumers. In general we use it to refer to businesses that skip an intermediary. Nike for instance refers to part of their business as DTC. Warbey Parker also sells other brands besides their own. Regardless you're free to define it however you like.

@harpsealSF

2 ай бұрын

@@shawnsg yawn. nearly all words have no legally defined meaning, doesn't mean we don't know what they mean.

The problem is that these DTC’s focused too much on growth and not enough on profitability. Cut the advertising, offer quality that isn’t available in most retail stores and charge a price that allows you to have positive free cash flow at the beginning. A lot of these businesses were cash flow positive before their IPO/DPO but as soon as they went public their SG&A expenses skyrocketed. If you make a great product (especially these days) it will spread by word of mouth.

@aurelie8220

2 ай бұрын

If quality was there like they advertise, these companies would have my business. But the products aren’t worth the price and do not perform how they claim. So I refuse to buy DTC anymore because it feels like throwing money down the drain. I don’t trust any of them.

@JayKay9112000

2 ай бұрын

@@aurelie8220 that’s what I’m saying. Instead of being tricked by an ad, you would learn about the product from someone you know who has used the product and can verify its value. Chewy and Home Fresh are pretty good examples.

@shawnsg

2 ай бұрын

Marketing is the lifeblood of DTC.

@JayKay9112000

2 ай бұрын

@@shawnsg it’s the lifeblood of META, GOOGL, AMZN, until the DTC runs out of their IPO money and can’t raise anymore capital.

@onemorechris

13 күн бұрын

i’ve been surprised how generic and safe these companies can be. you’re right, it’s because they are chasing growth over everything else as VC funding depends. that doesn’t lead to interesting stuff, just more mc donald’s and taylor swift lowest common denominator print nonsense

A look at any of their budgets makes the issue obvious; Marketing is almost always the biggest expense, sometimes more than the actual product AND shipping. And marketing often makes absolutely dumb money with poor metrics about return on the investment.

@tmzz3609

2 ай бұрын

These are really just advertising/drop ship companies. They don't manufacture anything. Most don't even fulfill their own orders and just use 3PL companies operating warehouses in LA for their Chinese products

@dianapennepacker6854

2 ай бұрын

Marketing doesn't return investment? Ha, okay bud. Tell that to Coke. Or Apple even. Stanely. Marketing is what makes products sell. It is what allows people to over price crap, and get away with it.

@TubersAndPotatoes

2 ай бұрын

How would people know they exist without any marketing? Hoping people to somehow find their website, without knowing much about them trusting them enough to buy their products then spread by word of mouth?

Time to support local businesses!!!

@Jay-eb7ik

2 ай бұрын

if they have better products, sure.

@ninjagirl226

2 ай бұрын

Ok to be fair I worked for a D2C they were a local business as well. We made Covid tests. We would ask the public to donate nasal swabs in exchange for a free covid test (we had to test all nasal swabs regardless). And were a great pride in that community til everyone kind of gave up on Covid and moved on to war in Ukraine.

@hermeskino711

2 ай бұрын

More like anywhere that supports my wallet

@sp123

2 ай бұрын

Local businesses are only worthwhile if they are homemade with quality

@USAads2023

2 ай бұрын

I am cool with that, as long price be same as online. Otherwise I have no motivation to drive to an store, when I can get it at my door, for creaper

How on earth is Birkenstock in this video? The company is 250 years old. They opened their first shoe factory in 1925.

@Cringe_department_15

2 ай бұрын

This must be a joke

@jackietreehorn069

2 ай бұрын

Bad reporting

@nikkitots

2 ай бұрын

Despite being an old company, Birkenstock just went public last year

@nikkitots

2 ай бұрын

Despite being an old company, Birkenstock just went public last year

i worked as a business planner and analyst in the fashion industry for 12 years. I worked for companies like Nike, JCPenney, and True Religion. DTC is NOT used to describe ecomm only business. Prior to the pandemic, many retailers treated ecomm like an afterthought. they were still trying to figure it out. so DTC primarily meant brick-and-mortar stores. ecomm/online sales were just an additional avenue to achieve direct-to-consumer sales.

@AskMiko

2 ай бұрын

Excellent point

@harpsealSF

2 ай бұрын

Factory store. Brand store. etc. But admittedly, saying "pure-play e-commerce Direct to Consumer" every time in the piece would get pretty tiring. Also, it is astoundingly rare to have a brick-and-mortar DTC start from zero and just appear all at once at any kind of scale, so the reporting still stands. These are companies (or were supposed to be, but got some wrong) whose *sole avenue* was, or was supposed to be, DTC e-commerce. Nike, Sony, Birkenstock, etc all sell their products in normal retail channels, in addition to their corporate owned stores, so while they have DTC channels, they are NOT DTC companies. JCPenny is not a DTC, they are a retailer of other people's products. Well, they had some house branded stuff, but that was very small potatoes.

Turns out there is a reason why retailers recieve some good profit for taking basic goods close to our homes, IT TAKES A LOT OF TIME, effort and investment to do so. Any middle man trying to replace two middle man would have almost the exact same expenses than the ones he replaces and would have to make some profit too. So is pointless to relay in those brands unless they are actually making some great innovation in the industry.

A lot of these companies started off with a Goal to get an IPO and scam investors. Their Business model was a broken one to begin with. It is a suprise that some of them lasted so long before the stock crash and burn. The biggest challenge company faces is how they can distinguish themselves with all the Generic variants of their products from Walmart and Amazon?

@RumbleRish

2 ай бұрын

It’s not a scam to investors unless they submitted & published false or somehow fraudulent filings and data. Otherwise, those who chose to invest had the information in front of them or could’ve found it prior to handing over their money (or they could’ve simply refrained from investing). Investors investing in these unprofitable companies that were almost certain to fail *doesn’t make the companies a scam.* 😂😂 Plenty of people called it from the beginning, that there’s no way most of these companies are gonna last

@hefoxed

2 ай бұрын

​@@RumbleRish scam just means a deceptive way to make money, so yea, these were in somr respects scams. Scams can be 100% legal.

@MrJwill919

2 ай бұрын

@@hefoxed and a lot of these scam DTCs are just frauds that can’t be proven in court but the intent is still there.

You forgot to mention one of the main headwinds for DTCs: Apple's 2021 iOS 14.5 updated that prevented Facebook from tracking customers. No longer able to track customers, it immediately broke the business model for targeting consumers via social ads.

@sd-ch2cq

2 ай бұрын

One of the few good things Apple ever did 🎉

@onemorechris

13 күн бұрын

i think this had an affect. As social networks turned up the price of ads for companies, they also turned up pushing them in people’s faces. so the ad blockers came in hard, including Apple

The increase in paid advertising after 2021 killed a lot of online brands. You can no longer sell a product online for under $30 profitably since the acquisition cost is far greater than $30. This was mainly because of the apple iOS update in 2021 that cut facebook from users browsing data. We had to shut down our brand that was on pace to do $20mm yearly revenue simply because facebook/ IG advertising was unaffordable as soon as the iOS update happened.

@anthonynelson6671

2 ай бұрын

So, in other words, the advertising model is currently severely broken?

@josephdantes1605

2 ай бұрын

This isn't Apple's fault like you kind of insinuate. People should have the ability to control who they share their data with.

@jethrotannis5673

2 ай бұрын

@@josephdantes1605I wish I could like this comment more…

@thisisyourtransmission

2 ай бұрын

Shipping cost is a problem too!

@stuyboy

2 ай бұрын

this! I wish more emphasis was placed on apple ios safari third party cookie and mobile id blocks.

There's also the issue of market saturation. Many of these businesses started off with little competition. Then other startups tried to get a piece of the pie. Even the traditional brands have jumped into the space.

@AskMiko

2 ай бұрын

I also notice their niche was cannibalized by their need to switch from a blue ocean strategy to a red one (the book explains this well). These companies go from being different, to being the same really fast (Glossier is an example).

Video could have easily been 10 minutes long and done without Kevin O’Leary. Also why the narrator insists on speaking like Jesse Eisenberg is beyond me.

@sandeshvantveen

2 ай бұрын

Vocal fry is in vogue I guess. Also at 0:42 the twenty teens? lol

@downsjmmyjones101

2 ай бұрын

That's why 2x speed exists.

@thomasdatdankengine5658

2 ай бұрын

Jesse..? Heisenberg? Breaking Bad?!

@winstoon

2 ай бұрын

Glad im not the only one who thinks so

@TheGooglySmoog

2 ай бұрын

Kevin O’Leary draws views but he is also a dickbag.

The actual problem with these brands is they operate on an outdated idea of how economics works. Historically, it was the goal to push the most amount of profits possible. You were to assume that your pool of potential customers was infinite and there was no limit to the amount of income obtainable. This business model does not work anymore. There is too much competition or too many monopolies to operate on such a model. And when we’re talking about a company like Smile Direct Club or Casper, these are big ticket items; you’ll only buy stuff to straighten your teeth once, and you only buy a mattress every 10 years…

Sounds like regular businesses doing regular business stuff like having bad/greedy ideas. Eternal profit and perpetual machinations absolutely await those who want that life 👍

Did they just say.... Chewy??????? It's owned by Pet Smart... Come on... It's been owned by Pet Smart for a while now.

Allbirds feel like crap. I bought two pairs and regretted it after two weeks. I think alot of these direct to consumer items are mediocre, and that's why they are struggling.

@aurelie8220

2 ай бұрын

Exactly. I’ve bought from a couple and have been burned every time, so I’ve completely quit.

As a soon retiree, keeping my 401k on course after a rocky 2022 is top priority. I have been reading of lnvestors making up to 250k ROI in this current crashing market, any recommendations to scale up my ROI before retirement will be highly appreciated.

@Christian67337

2 ай бұрын

The current market might give opportunities to maximize profit within a short term, but in order to execute such strategy , you must be a skilled practitioner.

@Damon4324

2 ай бұрын

Having an lnvestment advser is the best way to go about the market right now, especially for near retirees, I've been in touch with a coach for awhile now mostly cause I lack the depth knowledge and mental fortitude to deal with these recurring market conditions, I nettd over $220K so far, that made it clear there's more to the market that we avg joes don't know

@Scarlett34568

2 ай бұрын

I’ve actually been looking into advisors lately, the news I’ve been seeing in the market hasn’t been so encouraging. who’s the person guiding you?

@Damon4324

2 ай бұрын

Aileen Gertrude Tippy is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.

@Scarlett34568

2 ай бұрын

I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.

An eye-opening exploration of the challenges facing DTC companies. It's clear that the landscape is evolving, and the emphasis on profitability is becoming more crucial than ever. A reminder that sustainable business models are key to longevity in any industry.

The comment section is missing a big component here-- a lot of these companies that emerged never had the intention of becoming profitable at all, but rather that they intend to use their inflated valuation to procure lots of cheap loans instead (that they could continue to renew but never intended to payoff).

I shorted several of these after their IPO, but lost money cause it took a while for them to fall. It was obvious most of these would fail...Pelton would have had to sell bikes to every house in America to meet their peak valuation

@backlogbuddies

2 ай бұрын

Some don't make sense like Casper. How often do people need to buy beds

@sjneow

2 ай бұрын

​@@backlogbuddiespeople who rent apartments/dorms that doesnt comes with one, or they have hygene concerns over the provided mattress. They should be a stable student demographics annually for that kind of thing.

@backlogbuddies

2 ай бұрын

@@sjneow okay but you take your bed with you. You keep a bed for years.

@khalidcarrillo1132

2 ай бұрын

This is the reality. Most people can't afford to buy a bed every couple of years. @@backlogbuddies

@TheGooglySmoog

2 ай бұрын

Even if a company is absolutely doomed to fail there are so many other factors that prevent you from being able to accurately predict when they’re going to fall. A big part of it is that they’re being propped up by venture-capital, and another part of it is that they greatly exaggerate, their sales and revenue.

Works for the glasses company because the glass + frames are actually 5$ that they sell for 100$ and other retailer like pearl vision selling for 500$

DTC is just a tech version of the ancient Sears Roebuck catalogue. It works well for consumers out in the country and is a supplement to those in large cities. One of the problems is that those it fits best have less disposable income and they tend to be a shrinking and ageing demographic. Fashion brands can have a shelf life, particularly in the teen age group. Hot today, tepid tomorrow.

I'm sorry if I'm a bit rude, but the narrator woman's voice is totally incomprehensible. Her tone changes so quickly, that I'm hardly catching up in turning the volume up and down. I wish youtube channels nowadays were a little bit more attentive to this side of streaming.

It was the same as the tech bubble in the last 1990s. Just too many companies concerned about reach and market share, and no concern about ever being profitable. We just need to get customers, we will worry about profits later.... and then when later comes, it turns out they can never actually be profitable... they were just great at burning through investor's money.

because they never had viabke business models to begin with, and only exist because of venture capital, with money that had to go somewhere

@dunnowy123

2 ай бұрын

This is stupid. What about the business model doesn't make sense? Obviously selling DTC is ideal, and MOST brands prefer it. There isn't inherently anything wrong with it, it's just more expensive and requires more upfront cost and risk. If it works, you're golden

They are branded DTC that sells its products to the consumers but act like a designer bags/clothes, yet its strategy is focusing on being the next repackaged Walmart written in their packaging made in Hamptons.

I and my family have a distribution company and yes word of mouth is the best marketing tool. No ads not marketing. I run our online store and our pickup clients can come to the store and grab extra stuff we sell while getting their orders. When you can't see or meet the people your brand will disappear without being remembered.

@Cuteglamshopper

2 ай бұрын

I have to agree on what you said, with people seeing and meeting with one another. We are living in a time where there is a lack of social connection and more loneliness and isolation due to our upscale technological lifestyle. We as people are meant to be seen in community ( malls, libraries, parks, markets, and etc). We can’t be doing everything in our homes and not socializing or engaging with one another. It does do a mental toll on the psyche. People tend to show support and appreciation when there is actual physical engagement to be remembered. Also, let’s not forget the fun social aspect of going shopping with a friend of going to a bookstore with your date.

The problem with the company is the prices. Astronomical price for something that isn’t really worth it. I rented peloton for 6 months and realized it was useless to me for the price point.

Huge issue for DTC are returns. Today, probably an average of 30-40% of returns in DTC. More like 50-60% in women’s fashion (buy a cool dress for a dinner and send it back the next day)

@ahastar1141

2 ай бұрын

And not to mention, consumers generally like to buy online, but like the ability to return in person and get their refund right away. Compared to shipping it back, waiting for the quality check, then 3-5 days to hit their bank.

Cracked me up when Peleton ran commercials trying to convince people that their product wouldn’t wind up as an unused coat rack and people would actually continue using their machine.

Did they go belly-up or were they just overvalued on hype and special circumstances?

You have to sell what consumers want to make it work.

Kinda reminds me of what’s happening with streaming- the infrastructure of cable or retail distribution provides something that in the long run is necessary especially for customer acquisition

@someshwarrao42

2 ай бұрын

Cable is still losing subscribers like crazy and rightly so, the proposition was bad from the get go. The profitability of streaming is suspect, but only in the case of extreme fragmentation. Weird as it is, there is a balance between fragmentation and consolidation that is beneficial for consumers and streaming platforms.

When a whole business is dependent on ad-spend, it isn't really a real business. All these D2Cs when south when Google and FB Ads started spiking in price. They also realized that you cap out of market share quite fast and you end up having to go down the path of brick-and-motor and thus have to struggle with all the pain and logistics of traditional retail. IMO, I still think niche D2C with quality premium products that focuses on affiliate marketing can still win in 2024. But it has to be the type of company that is okay with reaching a certain level of growth and maintaining that. Trying to reach for the sky and IPO land isn't a real. These D2C companies are not designed well for the la-la-land of VC and IPOs.

I love Warby Parker, I always get compliments on my glasses but I do admit they feel a bit cheap. Affordable and cheap are not the same

Great insights on the DTC landscape shift. For entrepreneurs watching, remember that customer lifetime value (CLV) optimization can be a game-changer. By focusing on retention through personalized experiences and value-added services, companies can increase profitability despite market changes.

@sd-ch2cq

2 ай бұрын

Only if that customer retention happens through selling a good product for a fair price. But definitely not if you are constantly harassing and trying to upsell customers.

D2C has a place in today’s and in the future market. Those companies trying to go the D2C route just need to find the right formula to make it work. Loved the story!

@BS-jw7nf

2 ай бұрын

D2C is not new and it has it’s place if you want to offer a specific type of service or support for your product that would require ownership of your marketing. A company like Keyence is a D2C seller of measurement and automation equipment and is known for their “lifetime japanese service” that is included in the price. They even offer free unlimited employee training for their devices, but what special thing can you add with ear buds or shaving kits? The savings for the customer for D2C are also heavily overblown.

so, companies built on venture capital can't function on their own...

@squibbelsmcjohnson

2 ай бұрын

Color me surprised😂

@recondinent2

2 ай бұрын

what's the alternative? inherit the money to run a company? It's either be born rich or get rich people to support your model that will make them more money. Capitalism at its finest.

@khalidcarrillo1132

2 ай бұрын

or build slowly with your own money? Takes the longest, but most successful.@@recondinent2

@viserie9345

2 ай бұрын

@@recondinent2 Grants, venture debt financing (doesn't involve equity), revenue sharing, SBA loan, a good ole business loan. Venture Capital isn't the only way to start a business. It's the one that allows zombie corporations to survive far longer than their business model would allow. Especially if financial institutions already decided that the owners do not have the credit, industry experience, or a history of making a profit however small.

Lots of D2C companies, and non D2C companies, fail every day. That isn't a comment on the model. Tesla is an insanely successful D2C company.

I also noticed a trend towards higher end prices to match the trendy marketing. Originally the best DTC brands offered a quality product & split the middleman markup. During the late teens we seemed to be focused on “gourmet-ing” standard products with catchy marketing & subscriptions to trick the customer into thinking they’re getting more because there’s no middle man. Even if the product was better than in traditional outlets, it wasn’t enough to warrant the cost & commitment. It seems like a version of price anchoring success by association: DTC got a reputation for quality products at a good price, so others tagged onto the reputation but with other products. Kind of asking what else could be sold in the channel type instead of asking what the consumer needs & IF DTC could fit as a channel.

@sd-ch2cq

2 ай бұрын

Most successful DTC setup I've used were organic grocery subscriptions: benefit for the consumer was that it was a bit cheaper, benefit for the farmer-collective was that they got money in advance. Those are the only arrangements that make sense to me: when buyer and seller trust each other and want to do business directly.

@ttopero

2 ай бұрын

@@sd-ch2cq Would this be as a CSA? I did one but it was too much of what I didn’t want. The idea is promising though

I am more curious about the degree of expectations of larger profit margins... ...especially when venture capitalists are involved This is a more interesting subject matter since it has such a burden on our economy

Chewy is doing private labels like Trader Joe's, and Birkenstock sells on Nordstrom, amazon, DSW, and Zappos. Don't these business startups know that Even Apple needs to sell iPhones in Best Buy, BJ's, Sam's Club, Target, Walmart, and Costco...They need to go back to get an MBA first before starting a company... My daughter tried to buy a pair of glasses from Warby Parker, We ended up buying a pair of Ray-Ban for $250, Warby Parker just doesn't have enough selections to choose from... Casper, Amazon has many sellers sell similar quality mattresses for less than half price...

Plot twist Direct to consumer were never cheap

@nahor88

2 ай бұрын

All these comments, and no one is gonna mention how this lady sounded like she was speed running the video? Seriously, get a better host.

I think DTC is ready for a sustainable version, 3.0: mass customization. Not everything is subscription worthy, nor is it best delivered. But there’s still a big gap between what the consumer wants & what mass market retailers are willing to offer. I’m a male so I don’t know, but the new companies that are creating items like Beas for non-standard sizes are likely more sustainable over the years, creating a loyal customer base if they maintain the quality/value proposition they started with.

News flash! D2C companies racing to the bottom to maximize margins and ignoring QC and distro was a bad idea.

This is exactly what happened to my D2C startup last year, the CAC cost of advertising was so prohibitively high that we had to shut down. The greed of companies like Google and Meta entrenches the market lead of existing companies and squashes innovation.

they weren't "struggling" until they expanded and tried to justify their valuations with associating themselves as a "tech" company

Customer exeprience matters and stores are innovating with online value beyond price. At the same time, online advertising costs are a high digital rent eroding old DTC cost advantages. Squeezed on both ends, the pandemic DTC retail bubble is deflating fast.

How do you think this trend vacating demand of DTC ad space on mobile affect the ad market on connect tv and for streaming platforms, dis nflx para but also mgni and ttd

The choppy cadence of the narration is pretty ear-grating.

you answered it yourself, it has nothing with being direct to consumer. it has to do with the fact that they aren't affordable. while selling DTC might seem "cheaper". it's not, why? while a large manufacturer is selling their own product to store (middleman), that store is also taking in products from thousands of other manufacturers. while a DTC brand like some of the ones you mentioned, offer "premium" products that are still expensive because these brands have to pay all of the people that still do what the middleman does this isn't like buying direct from a factory where its just a bunch of workers and engineers, its still a brand, they have marketing, they have sellers, they have the middleman integrated in their own company, it costs more than a traditional retailer because well, that traditional retailer is selling orders of magnitude more products and brands

I wouldn’t call all of these DTC, I’d call these poor business models. I know several “DTC” brands and I gotta say there weren’t any depicted here. I wonder why.

Mosy D2C items rely on impulse and marketing. Whenever people dont have extra money, you need people in the supply chain helping promote, like wholesalers and retailers. Everyone becomes invested. And consumers impulsively buy when doing their mandatory shopping. I watch sharktank rip people apart for not wanting to go retail. See how its working now.

The problem with most of these direct to consumer companies was they sold counterfeit products or products of questionable quality. What you see is not what gets shipped to you. You often do not get what you actually paid for. Product fraud is a very serious problem with direct to consumer companies like product substitution.

@aurelie8220

2 ай бұрын

Yes! I was all for it, but everything I bought was terrible and not at all what they advertised. Most of the companies, I go on and see all these complaints at the BBB for my same problem. Now I flat out refuse to buy DTC because my consumer trust is gone.

We saw a quick glimpse of Mr Wonderful, Kevin, but it got me thinking and I'd love a video of how Shark Tank influenced entrepreneurship and new business. A lot of these DTC darlings are featured on the show, but I have to wonder if the show itself has influenced new businesses, is it just a marketing/tv commercial play, or how some of the big brands that came from the show have almost come back into itself.

What happened to companies growing privately and not depending on valuation and IPOs. If companies focused on bottom line and savings and growing instead of just Wallstreet we would see less layoffs and more brands would last longer.

We need to go back to physical stores, physical media cuz. I don't want to pay subscription service. You also support your local community Infrastructure when the jobs go the community goes. HBHM

I don't really care how I get my product as long as it is the same price no matter whos website I am buying it on. I am sure amazon is taking a cut of the sales, so it makes sense for people with a large enough business to move to their own facilities. it isn't like online shopping is going to slow down significantly, so really the issue is that the businesses weren't operated profitably because that wasn't the goal, the goal for venture capital is to scale up a business as fast as possible, and then when the company is worth the most based on sales and already tapped out growth curve that is about to level off, they sell. Any company going under in this new inflation heavy environment with ever balooning consumer facing pricing, is a business that was operated unsustainably. They can either move to a profitable business model, or they can file for bankruptcy in order to avoid paying back their loans that are now being written at 5+% instead of the free debt they were getting financed with before the fed rates were increased.

i have to ask, who told nbc it was ever in a golden age? these companies has never done anything but break even, just because you see it's ads on youtube channels, doesn't mean they're doing well

Perhaps this is an indictment of the model of i.p.o. and the stock market that demand and dictate "Profit or die"? The stock model seems to incentivize acquisitions leading to an increase in the rate of oligopoly and/or monopoly. People need increase of options out there in whichever facet of the market exists. The more I hear of and learn of the stock market the more I'm inclined to think that it as a tool really isn't making things better for people. The companies, their products, and the customers are the ones losing to the predation of the stock market.

There is no need to pay for advertising. To drive customers to your products. Paid advertising is a thing of the past and a waste of money. Especially when the market is saturated with the same or similar products. Businesses can save money and still get sells without paying for advertising.

This is the problem with having a lack of business fundamentals and focusing on fads. These companies got blinded by the DTC model and thought that was the end-all of things. It was "hip" and cool, esp in the eyes of VCs. Notice how all these "trendy" business fads come and go - DTC, design thinking, lean startup, etc. They all have one thing in common - a reckless abandon of management fundamentals and rigor. The fact that Warby Parker continues to thrive is proof of this - they know DTC is just one of the channels to reach customers; and that they should strategically orchestrate a variety of channels - brick & mortar, distribution in other retailers, direct, digital, etc.

The only DTC product I’ve ever bought is a pair of Thursday Boots. And it took me years to decide to pull the trigger. I had to do a ton on research about the quality and customer before I made my decision. I’m happy with my purchase. Perfectly good boots for $200. My main issue with DTC is that I can test the product without buying it. I understand that returns are a thing. But that’s just a hassle and inconvenience I don’t feel like going thru. And I feel like DTC appeals to impulse buying, which I am against.

Lol I just learned what direct to consumers is. The only I had contact with was threasup which I still use for second hand clothes because since I started using them, I have never gotten my size wrong thanks to them giving you the measurements of the clothes. I haven't bought a new item of clothes since 2022 so am definitely not going back to the physical stores. And mind you, I tried last year and I ended up leaving after 30 minutes because the sizes were so bad each time I looked at myself in the mirror, I felt like sh**. This isn't plug in for threadup. I just think they do it well and it has personality done me right.

if we agree that we want a good future, that good future does not include leaving your house as little as possible. Go into your community. Go into your shops. Have a stake in where you live.

12:35 on a side note market participants are also to blame for these accepting these valuations at face value all in fear on missing out the latest thing, I'm still relatively new to the stock market but perhaps this sentiment can be share amongst others in different levels of experience with stocks or overall markets.

So, DTC is not dead, but it is evolving. The companies that are going to be successful in the future are the ones that can adapt to the changing landscape and overcome the challenges that are facing the industry.

D2C really just a mean to market, not the end. Ultimately, customer experience is what make these start-ups survive and thrive.

The only reason these companies and brands made it to the public markets at such extreme valuations is because of the monetary policy decisions by the Fed accompanied by exorbitant fiscal spending.

Blitzscaling doesn’t work if you don’t have a solid business, long term plan with actual profitability points. Then Covid made some brands brave and believe they’re farther along in the process than they are/were. Mail order mattress… sure I’ll trust where I spend half my life on an algorithm choice for me. If I don’t like it, return it, where it goes into a land fill because you can’t resell or reuse a mattress unless its a person to person transaction

D2C companies forget one thing, thy started to provide better customer experience and products. But overtime they just start acting like they are big companies... They are not using middle man but PRICE MARKEUPS are more than other retail products. They become greedy and almost atpoint that this is what we are offering if you don't like it go somewhere...

I’m waiting for the private equity trend to kick in to sweep up these companies that have assets worth buying, doing their typical slash & extract before dumping!

Some of these companies simply work better under private ownership. Especially if you genuinely care about the product you're selling and want to retain control over the process. Can still be incredibly successful, you just don't get free money from speculation.

For me big factor is ease of use... I have accounts on a couple shopping sites, one with "free shipping" subscription. If I have to register on a new website, provide my data/ card details etc. it needs to be something truly unique and unavailable on those shopping sites...

Warby Parker has an actual physical presence. I consider them in a different category. The entrepreneurs on Shark Tank usually go into the direct to consumer path, which is a red flag for consumers and niche audiences to proceed with caution.

Some of the brands like Glossier and Warby Parker actually have good products. Warby Parker is cheaper compared to RayBans or other Luxottica brands but their way of getting people is very pricey. You can try out 5 frames then return it seems like a good pull but it's costly on their end. I do like the premise but it is cheaper to build a store and have people try out the frames there. Glossier though declined in quality. It wasn't cheap and they were even at the forefront of that clean look that was just brewing in the US and already has Asia on a chokehold. Also, the video didnt show that legacy brands are also advertising on social media at humongous cost. Like L'Oreal and Colgate's digital ad budget is crazy. They couldn't compete with that. I feel like in the end, you need a quality product that stands.

Direct to consumer only works for private companies

Doing well in the stock market doesn't necessarily mean you are doing well as a business.

I bought couple of DTC products during covid and they were the last I bought in DTC method. I was neither unhaapy nor happy about the purchase. Then I moved to trying the products before buying them online. I guess the latter method is the good alternative to DTC. beacuse I enjoyed the shopping process also I am much more happy with the purchase.

Buying anything endorsed by an influencer or celebrity is one reason why i will NOT be buying the product (or choosing a cheaper & similar product) **** 90% of the time

Direct to consumer, as in directly into the consumers rear. B2b businesses weigh out their relationships and profitability and make sure to make those economically viable relationships work. In a dtc business model the businesses do the opposite and instead greedily shaft their customers

venture capital and having to hand half of that funding to Mark totally distorts what’s possible. i don’t think the general public understands this

Your toothpaste example is perfect to demonstrate that our method of trying to create a business is flawed. Find a need and fill it. Don’t sell what everyone else is already selling .

D2C products usually are a one time buy. Like peloton. Once you have one, you probably won’t buy it again no matter how much you love it.

I wish some DTC brands were sold in Target or Amazon. It makes shopping more convenient

@wsidechris

2 ай бұрын

It’s what Harry’s did. I got my first razor in 2014 from their site, but have been purchasing their blades from Target ever since. They made the right choice to do that quickly.

0:40 Did she say "the twenty teens"? Is that a thing, like referring to 2013 to 2019? I'm not sure if I heard correctly.

@samuhlm2

2 ай бұрын

yes. Ive heard "tens" more than "teens" but either are applicable

These new age business models that prioritize short-term growth over long-term survivability are showing time and time again, in sector after sector, that greed doesn't pay off in the long run.

I think why they fail is because most of them are selling single type / single category of products, i think if you want to become a D2C retail, you should also sell essential needs, like groceries.

Hi CNBC,I love the content and found it really useful. However can you please improve the voiceover? The voice dips make it difficult to follow and the speaker is usually either too fast or takes unnecessary pauses making it distracting.

Peloton was surprising - everyone I know bought that bike. I thought it came with subscription service