D2C (direct-to-consumer)

Instead, the manufacturer operates its own sales channels such as an online shop, an app or a brand store and thereby controls brand, price, customer relationship and customer data itself. D2C is often also abbreviated to DTC and, alongside B2B (business-to-business) and B2C (business-to-consumer), is one of the central sales models in digital commerce.

The decisive difference from the classic retail model lies not in the individual act of sale but in control over the entire value and communication chain. Whoever sells directly owns the interface to the customer, and with it the data that in the retail model remains with the intermediary.

D2C, B2C and B2B: the distinction

The three models describe who sells to whom, not necessarily via which channel:

• B2B (business-to-business): one company sells to another company, for example a manufacturer to a wholesaler or a software provider to a mid-sized business.
• B2C (business-to-consumer): a company sells to end customers. This includes classic retail, which has previously sourced the goods from the manufacturer.
• D2C (direct-to-consumer): the manufacturer sells directly to end customers and deliberately skips retail in the process. D2C is therefore a special form of B2C, but without intermediate stages.

The distinction from a mere online shop is important: not every web shop is D2C. If a retailer sells third-party brands online, that is B2C retail. Only when the brand owner itself sells directly to end customers is it called D2C.

Why manufacturers rely on D2C

Direct sales shift control and margin in favour of the manufacturer. The most important advantages:

• Higher margin: the mark-ups that wholesale and retail otherwise take for their services remain with the manufacturer.
• Full control over brand and price: no third-party discount campaigns, no listing negotiations; the manufacturer decides how the brand presents itself and what it costs.
• Own customer data: purchasing behaviour, preferences and contact details end up unfiltered with the manufacturer instead of with the retailer. This is the basis for targeted marketing, personalisation and product development.
• Control over the customer journey: from the first contact through the purchase to after-sales, the manufacturer designs every touchpoint itself.
• Direct control of the supply chain: the manufacturer is no longer dependent on the ordering policy of third parties.

The real strategic lever is proximity to the customer. The more precisely a manufacturer knows its target group, the better it can tailor range, shop and messaging. This feedback loop (learning from data, sharpening the offer, measuring again) is hardly possible in the classic retail model, but is the core of the D2C model.

The challenges of D2C

D2C does not run by itself. Three hurdles regularly occur in practice:

Established retailer relationships

Established brands have built up a sales network over years. The move into direct sales can strain these relationships, because the manufacturer suddenly appears as a competitor to its own retail partners (channel conflict). The loss perceived in the short term often weighs more heavily than the long-term gain, which is why many manufacturers shy away from the switch.

Technical and logistical know-how

Direct sales require a robust shop system, clean processes and staff who can operate both. If this expertise is not available internally, it has to be built up or bought in externally. On top of this comes logistics: shipping to many individual end customers is considerably more complex than delivering pallets to a retailer, with different packaging, more small-scale fulfilment and returns management that often did not exist at all in B2B business.

Higher marketing effort

In the retail model, retail takes over part of the visibility. In the D2C model, the manufacturer has to build up reach, advertising and brand awareness itself. A considerable part of the retail margin saved therefore flows into building up its own marketing. Anyone who does not factor this in underestimates the total costs of direct sales.

In practice, many established manufacturers resolve this conflict of objectives with a hybrid model: D2C does not run instead of but alongside existing retail. A clearly defined product line or target group is sold directly, while the retailer network remains in place. This makes it possible to collect customer data and experience without jeopardising the established business.

D2C in practice: the example of air up

A well-documented D2C example from the DACH region is the Munich brand air up, which sells a drinking system that flavours water via scent. air up has been on the market since summer 2019 and was built as a pure direct brand from the outset: without legacy retailer baggage, "born digital". A small founding team grew into a company with more than 300 employees that, according to its own information, is active in several European countries and has sold millions of drinking bottles.

Revenue grew from around 90 million euros (2021) to over 159 million euros (2022), an increase of around 75 per cent in one year, and reached around 200 million euros in 2023. Decisive for the success is less the product alone than the consistently direct model: air up builds its own brand experience, cultivates a community and uses the direct channel to sharpen products and messaging on the basis of data.

Important for classification: air up is a digital-native company. For established manufacturers with a grown sales network, the path is considerably more demanding, which is an argument for a hybrid entry instead of a complete switch.

Implementing a D2C shop technically

The technical basis decides whether a D2C model scales. Four building blocks are central:

• Target group and data: before technology comes the question of exactly whom you are addressing and which data you want to collect. The sharper the target group, the more effective the direct channel.
• Shop system: a flexible platform, such as Shopware or a comparable e-commerce system, gives the manufacturer control over the brand experience and can be connected to merchandise management, shipping and marketing. For several touchpoints, headless or composable commerce approaches come into question.
• Product data: in direct sales, the product description replaces the salesperson in the shop. Complete, consistent data, ideally maintained via product information management (PIM), decides on findability and conversion.
• Logistics and marketing: shipping, returns and reach must be planned and budgeted realistically from the outset.

Market relevance of D2C in German-speaking countries

D2C has long since ceased to be a niche phenomenon. Back in 2022, a diconium study showed that 63 per cent of the manufacturers surveyed considered D2C a (very) relevant sales model; 68 per cent of the manufacturers already active expected to generate more revenue via the direct channel in five years than at the time of the survey. The direction was therefore clear: away from pure dependence on retail, towards their own channels.

How far this development can go in individual categories is illustrated by a 2025 Simon-Kucher study on the consumer electronics market: according to it, 64 per cent of all smartphones are now bought directly from the brand, via its own online shops, apps or brand stores. In product segments with strong brand loyalty, sales are therefore noticeably shifting from retail to the manufacturer.

For mid-sized companies, this does not mean that every manufacturer has to switch completely to direct sales immediately. But it does mean that a direct channel of your own is increasingly becoming part of the strategic standard: as a source of customer data, as a margin lever and as a safeguard against the growing negotiating power of large platforms and retailers.

D2C, customer relationships and measuring success

The greatest long-term value of D2C lies in the direct customer relationship. Because the manufacturer owns the interface to the customer, it can encourage repeat purchases, systematically evaluate feedback and play out new products specifically to existing customers. Many D2C brands build a community or a membership or loyalty programme on this, which increases loyalty and reduces dependence on expensively bought reach. Subscription and repurchase models (subscription commerce) also work particularly well in the D2C channel, because the manufacturer sees and controls the entire life cycle of the customer relationship.

So that the direct channel brings not only revenue but also profitability, a few metrics are decisive. These include the customer acquisition cost (CAC), i.e. the cost of winning a new customer, the customer lifetime value (CLV) as the total value of a customer relationship over time, the repurchase rate and the returns rate. Only the ratio of these values shows whether a D2C business is viable: a high CLV justifies higher acquisition costs, whereas a low repurchase rate exposes a model that only grows through expensive performance marketing. Precisely because the manufacturer collects all this data itself in the D2C model, it can measure these metrics cleanly at all, another structural advantage over anonymous sales through retail.

Frequently asked questions about D2C

What is the difference between D2C and B2C?
B2C describes any sale by a company to end customers, including retail with third-party brands. D2C is the special form in which the manufacturer itself sells directly to end customers without intermediaries.

Is D2C worthwhile for small manufacturers too?
Yes, an entry via a single product line in particular is feasible for smaller manufacturers too. What matters is a realistic view of the marketing and logistics effort and a shop system that starts small and grows with you.

Does D2C displace classic retail?
Rarely completely. Many manufacturers run a hybrid model in which D2C runs as an additional channel alongside retail. Large brands have also shown that pure direct sales without retail partners involve risks.

What data does a manufacturer gain through D2C?
Among other things, purchase history, basket and click behaviour, contact details as well as feedback and reasons for returns, i.e. precisely the information that remains with the intermediary in the retail model.

Is selling via Amazon still D2C?
That depends on the set-up. If a brand sells via its own self-operated brand store on a marketplace, it retains part of its brand sovereignty but shares data and fees with the platform. Pure vendor business, in which the marketplace buys the goods and resells them, is on the other hand more wholesale than genuine D2C. Most brands therefore combine several channels and treat their own shop as the one place where they retain full control over brand, price and customer data.

Further neutral information on the overarching concept of direct sales can be found, for example, in the Wikipedia article on direct-to-consumer.