Analysts Throw Cold Water On The Great DTC Pivot

As brands large and small try to capture more margin by selling directly to consumers, analysts with BMO Capital Markets question whether the strategy is truly more profitable. In a recent report, the analysts found that wholesale sales come with higher margins before taxes and interest than DTC sales. Moreover, shifts to DTC channels could translate into lower sales dollars overall even though brands capture more of the sales price for themselves. The BMO analysts wrote that “although revenue per item grows at DTC, the units lost by abandoning wholesale generally overwhelm the unit price lifts at DTC.” Read more at Retail Dive.