Direct to consumer

What it means

D2C, direct to consumer, is a business model in which a manufacturer sells to end customers itself, usually through its own online store, without wholesalers or retail chains. Typical examples are cosmetics, clothing, food and electronics brands that build a direct relationship with customers.

The manufacturer earns a higher margin because it shares it with no one, and above all it gains customer data: what people buy, how often and why they leave. These data are gathered in a customer data platform and support product development and personalised marketing.

In return it takes on tasks that retailers used to handle: marketing, warehousing, last-mile delivery, customer support and complaint claims. Many brands therefore combine D2C with sales through a marketplace and traditional retailers.

How it works in practice

Selling directly to consumers brings consumer protection duties: pre-contract information, the right to withdraw from a distance contract within 14 days, a complaints policy and correct price display, including discounts under the Omnibus Directive rules.

When selling to other EU countries, watch the 10,000-euro threshold for distance sales of goods. Above it, VAT is due in the customer's country, which the OSS scheme simplifies. A manufacturer that previously sold only to distributors meets this for the first time.

D2C economics depend on customer acquisition cost and repeat purchases. If the brand lacks awareness, performance advertising can eat the whole margin, so from the start it pays to measure what a customer brings over the entire relationship, not just the first order.

What to watch out for

Direct sales can cause conflict with existing trading partners if the manufacturer undercuts them. Pricing and exclusivity clauses in distribution agreements need reviewing, bearing in mind that forbidding distributors to set their own prices is risky under competition law.

An own online store also means processing personal data and cookies, for which the manufacturer is responsible. Without proper cookie consent and clear privacy information there is a risk of fines and lost trust, which hurts twice as much for a brand built on its customer relationships.