3 Things all D2C Founders will have to do...

These 3 strategies would work in an ascending order depending on the scale of the brand...

👉🏼 The Customer Acquisition Costs through online channels have become so high that unit economics of all new D2C brands are completely out of whack. If you have to spend Rs 70 on ads to make a sale of Rs 100, you’re burning money with every sale...

And what helps reduce this cost is... content (daily) and building a strongly engaged community that consists of superfans who love your brand and will continue to buy.

Also, please use two accounts for your brand - one with only organic content and the other through which you run ads. because if you run ads on an account, the platform kills your organic growth on it by profiling you as a paying user.

So, content and community trump CAC.

👉🏼 Next, as online channels and marketplaces are darn expensive and competing brands a dime a dozen, the only moat is owning distribution and penetrating deeper into India...

Which is happening through faster and deeper penetration through offline channels of not just modern trade but general trade.

So, offline channels trump online channels.

👉🏼 Once you solve for CAC and offline distribution, thus removing the dependency on online intermediaries and marketplaces to eat your entire profit margin... comes removing dependency on the supply side...

If you dig deeper, you’ll realize most brands in a category get their entire range of products contract manufactured from the same bunch of suppliers, who also supply to all their competitors.

Same kajal manufacturer providing the product to all cosmetics brand... same lotion manufacturer making for all BPC brands...

Then, owning manufacturing and gaining control on backward integration helps build a stronger moat.

So, owning manufacturing trumps contract manufacturing.

👉🏼 Reiterated for clarity, so that all D2C brands learn this by heart as the future of their industry...
- Content and Community trumps CAC
- Offline channels trump Online channels
- Owning manufacturing trumps contract manufacturing

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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.

Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.

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