DTC brands: What they are and why B2B companies are building direct-to-consumer channels

If you're a manufacturer or CPG brand that's spent decades selling through distributors and retailers, you've probably started hearing about "DTC brands" or "D2C brands" and wondered what's actually happening here.

DTC brands—companies that sell directly to consumers without intermediaries—have changed how products reach customers. What started with digitally native startups like Warby Parker and Dollar Shave Club has now become a channel that traditional B2B companies can't ignore.

But here's what most articles won't tell you: there's a massive difference between being a DTC-native brand built for direct sales from day one and being a traditional B2B company adding a direct-to-consumer channel alongside existing wholesale relationships.

This guide breaks down what DTC brands actually are, why traditional manufacturers are moving into this space and what it really takes to make it work.

What are DTC brands?

DTC (direct-to-consumer) brands sell their products directly to customers without relying on wholesalers, distributors or retail partners. Instead of the traditional supply chain—manufacturer → distributor → retailer → consumer—DTC brands control the entire journey from production to purchase.

Digitally native DTC brands

The term "DTC brand" originally referred to digitally native companies—businesses born online that were built around direct sales from day one:

• Warby Parker (eyewear): Cut out optical retailers, sold glasses online at a fraction of traditional prices

• Dollar Shave Club (razors): Eliminated the retail markup, delivered razors via subscription

• Casper (mattresses): Bypassed mattress stores entirely, shipped bed-in-a-box directly to homes

• Allbirds (shoes): Started online-only, controlled brand experience from first click to unboxing

These companies didn't just sell online—they built their entire business model, brand identity, operations and customer experience around owning the direct relationship with consumers.

Key characteristics of DTC brands:

• No middlemen: Product goes straight from manufacturer to consumer

• Own customer data: Direct access to purchase behavior, preferences, email addresses

• Control brand experience: From website design to packaging to customer service

• Built for ecommerce: Digital-first infrastructure, fulfillment and marketing

• Higher margins: Keep the retail markup that would normally go to distributors/retailers

The DTC model exploded between 2010-2020 because digital advertising (Facebook, Instagram, Google) made it possible for small brands to reach customers cost-effectively without needing shelf space at Target.

DTC-native vs. traditional brands going D2C

Here's where it gets important for your business: not all DTC brands are the same.

DTC-native brands: Built direct from inception

• Started with ecommerce as the primary channel

• Never had distributor relationships to manage

• Designed operations, marketing and product around direct sales

• Examples: Glossier, Outdoor Voices, Away luggage

Traditional brands adding D2C: Existing B2B/wholesale business adding a direct channel

• Already selling through distributors, retailers or B2B relationships

• Adding direct-to-consumer as a new channel alongside existing ones

• Must retrofit marketing, operations and systems not originally built for D2C

• Examples: Yeti, Patagonia, most manufacturers exploring D2C

Why this distinction matters

If you're a traditional B2B company, you're not becoming a "DTC brand" in the pure sense—you're adding a D2C channel. That means:

• You have existing relationships with distributors/retailers you need to protect (or strategically manage)

• Your product pricing was built for wholesale, not direct retail

• Your marketing assets were created for B2B buyers, not consumers

• Your operations may not be set up for individual order fulfillment

• You need different systems, processes and potentially different team members who specialize in DTC transformations

The challenges are different. The opportunities are different. And if you approach it like a DTC-native startup, you'll miss critical considerations specific to traditional brands.

Why traditional B2B and manufacturing brands are adding D2C channels

So why are manufacturers and CPG brands that have sold through traditional channels for decades suddenly exploring direct-to-consumer?

1. Market pressure and changing buyer behavior

Consumers increasingly expect to buy directly from brands. COVID-19 accelerated this shift dramatically—customers who never bought groceries online were suddenly comfortable ordering everything direct. That behavior hasn't reverted, and D2C brands now represent a $150+ billion market.

Meanwhile, Amazon has trained consumers to expect:

• Fast shipping

• Easy returns

• Direct access to product information

• Customer reviews and transparency

Traditional retail can't always compete with that experience.

2. Margin compression from distributors

When you sell through distributors and retailers, you're giving up 40-60% of the retail price. For a product that retails at $100:

• Manufacturer cost: $25

• Wholesale price to distributor: $40

• Distributor sells to retailer: $60

• Retailer sells to consumer: $100

Going direct means you can sell that same product for $70-80, give the customer a better price than retail and still make significantly more profit per unit than wholesale.

3. Direct customer relationships and data

When you sell through distributors, you have no idea who's buying your product. You can't:

• Email them about new products

• Understand their purchase behavior

• Build a relationship beyond the transaction

• Collect feedback directly

D2C gives you direct access to customer data, which informs everything from product development to marketing strategy.

4. Control over brand experience

When your product sits on a shelf next to 47 competitors, you can't control how it's presented, who's selling it or what the customer experience is like. Direct-to-consumer means you control:

• How your product is positioned and marketed

• The unboxing experience

• Customer service quality

• The entire journey from discovery to purchase

What makes a successful D2C channel for traditional brands

Adding a D2C channel isn't as simple as launching a Shopify store and running some Instagram ads. Traditional B2B brands face unique challenges that digitally native DTC startups never had to deal with.

It's not just about the platform

The technology (Shopify, BigCommerce, WooCommerce) is the easy part. The hard parts are:

Operations: Can you fulfill individual orders profitably? Do you have warehousing set up for D2C? What about returns and customer service?

Marketing: Your B2B marketing materials (spec sheets, wholesale catalogs, trade show booths) don't work for consumers. You need different content, different messaging, different channels.

Pricing strategy: How do you price direct sales without undercutting your retail partners? This gets complicated fast, especially if you have wholesale accounts with discount retailers. Without alignment between your sales and ecommerce teams, you risk channel conflict that can derail your D2C launch before it starts.

Real example: I've worked with legacy manufacturers where siloed thinking created major problems—secondary sellers bought product from Dollar Tree, attached to Amazon storefront listings and undercut the direct price. The brand tried to sell for $40 but resellers could sell for $35 and still profit, so they won the Buy Box every time.

Systems and processes: Most traditional B2B companies have manual processes for product updates, inventory management and asset management. Those processes don't scale for D2C. You need new tech stacks including Product Information Management (PIM) and Digital Asset Management (DAM) software, among others.

Team and skills: B2B sales teams are different from D2C marketing teams. You may need different expertise.

This is why so many traditional brands struggle with D2C—it's not a channel add-on, it's a business model shift that requires different infrastructure, processes and thinking.

Example: How Yeti successfully added D2C

Yeti is one of the best examples of a traditional brand that successfully built a D2C channel alongside wholesale.

For years, if you wanted a Yeti cooler, you went to Bass Pro Shops, Dick's Sporting Goods or your local outdoor sports retailer. Yeti was a wholesale brand—sold through distributors and retail partners.

What Yeti did:

Started with their own website and stores: They didn't abandon wholesale partners. They added direct channels (Yeti.com and Yeti-branded retail stores) while maintaining relationships with Dick's and Bass Pro.

Built a direct customer base: Through their website and email list, Yeti now has direct relationships with customers. They can launch new colorways and limited editions exclusively online without competing with retail partners on core SKUs.

Invested in content and brand experience: Yeti created a media-rich brand experience online that retail stores couldn't replicate—storytelling, product education, customer reviews and lifestyle content that treats their social media and digital channels like a DTC brand would.

Controlled pricing and inventory: By selling direct, Yeti controls when products go on sale (or don't), manages inventory better and captures more margin on direct sales.

The result

Yeti now generates significant revenue from D2C while still maintaining strong wholesale partnerships. Customers who used to only see Yeti at Dick's now order direct from Yeti.com.

Key lesson: Yeti didn't flip a switch overnight. They strategically built D2C infrastructure while managing existing retail relationships. They started with online-exclusive products that didn't compete directly with what Bass Pro was stocking.

The fundamental shift to DTC

DTC brands—whether digitally native startups or traditional B2B companies adding direct channels—represent a fundamental shift in how products reach customers. For manufacturers and CPG brands, adding a direct-to-consumer channel isn't about abandoning existing relationships. It's about building a new revenue stream with better margins and direct customer access.

But here's what matters most: going D2C requires different marketing infrastructure, different processes and different systems than what got you to success in B2B. Understanding what DTC brands do differently is the first step. The next challenge is building the marketing systems and operational processes to support this model without disrupting your existing business.

Considering a D2C channel for your brand? Let's discuss what your marketing infrastructure needs to support direct-to-consumer sales alongside your existing channels.