Cut out the middle man and boost margins by selling your product directly to consumers. This sounds like a simple objective to improve a business's operational efficiency but generating DTC sales is no easy task.

This is where brand development pays dividends. By being a strong brand consumers know and trust the consumer now shops directly on the company website. The company website is a safe space. Competitive products are out of sight and out of mind of the consumer. It's not like the battlefield of Amazon where products compete on price and ranking to attract the eyeballs (and wallets) of consumers.

Owning the relationship between the consumer enables a really powerful flywheel too. This relationship unlocks data on consumer preferences and the information needed to target consumers with future promotions. So not only are the higher margin DTC sales allowing the company to reinvest more capital into the business but the data collected allows for more effective reinvestment.

I believe it's fair to use DTC sales as proxy of brand strength. However, there will be exceptions, $AAPL is among the strongest brands in the world but as of 2021 just 36% of their sales were direct-to-consumer (the phone carriers are a very powerful middleman).

Venture capitalists love to fund companies that are digitally native and focus on owning the customer relationship. By being more efficient they can pass the savings on to the consumer and so forth begins their cycle of disrupting incumbents. That's how the story goes for $HIMS but it turns out that in order to grow they needed help from a middleman, Target, as Hims products are now on Target shelves.

This isn't a totally new concept. Before we went to grocery stores there was a milk man who delivered the product directly to your home. Grocery stores are a great example of where the middleman provides value to consumers as it would be a nightmare to go on company websites to order 30+ items every week( Frito-Lay wants you to order your chips directly).

So to wrap this up I'm looking to compile a list of the most impressive Direct-to-Consumer sales stories.

For reference at the top we some DTC superstars in $TSLA & $PTON who are 100% DTC.

A surprisingly high figure from $YETI where 55% of their sales in Q2 2021 were DTC.

A potential transformation in revenue collection methodology from $SMG as close to 10% of sales in their US Consumer segment is DTC. The US Consumer segment focuses on lawn fertilizer so it is feasible that consumers seek to have their yearly fertilizer supply dropped off in the beginning of spring (much simpler than driving to Home Depot to grab a few 30lb bags of fertilizer).