Why Most DTC Brands Never Make Real Money (And How To Fix It)

The key to building a profitable DTC brand lies in understanding and optimizing the Profit and Loss statement. Brands often waste money due to a lack of clarity on their P&L elements. Refusing to spend bad ad dollars is crucial, emphasizing the importance of knowing unit economics, eliminating creative testing campaigns, and understanding the marginal return on ad spend. Engineering the supply chain is also critical, focusing on cost of goods sold (COGS) and related expenses. Increasing the average order value (AOV) helps offset shipping costs, while maintaining low operating expenses (OPEX) as a percentage of revenue is achieved through offshoring, AI, and better management. Growing slower at a higher margin reduces risk and improves cash flow.