DTC Economics
The decision matrix for owning the customer versus renting them.
The fee-stack table in Act 4 showed the numbers: marketplaces cost 11 to 20 percent of RRP, own-domain checkout costs around 3 percent after card fees. The gap is real and it compounds every month you run the shop. The friction people underestimate is not the money; it is traffic. Marketplaces bring shoppers to you; your own domain requires you to bring shoppers to it.
The volume floor where own-domain beats a marketplace on take-home is lower than most makers think, because the marketplace fees rise with turnover but the DTC platform fee is fixed. A ballpark: at around fifty orders a month on a $38 RRP, the Shopify + Stripe stack is already netting more per order than Etsy even before Offsite Ads erosion.
- Etsy Basic
- Fees ~£4.50/order = £450/mo. No platform fee. Traffic included.
- Amazon Handmade
- Fees ~£4.50/order = £450/mo. No platform fee. Traffic included.
- Shopify Basic + Stripe
- Fees ~£1.20/order = £120/mo + $39 platform. Traffic self-generated.
- WooCommerce + Stripe
- Fees ~£1.20/order = £120/mo + ~£20 hosting. Traffic self-generated.
- Marketplace baseline take-home documented per SKU
- Own-domain platform selected (Shopify or WooCommerce) with a public URL live
- Card processor connected, sandbox charge tested end-to-end
- Email capture live on every product page from day one
- First 6-month acquisition budget ring-fenced from the fee savings
- Repeat-customer flow (post-purchase email, refill nudge) mapped
| Symptom | Likely cause | Fix | Prevent |
|---|---|---|---|
| Own-domain traffic is a fraction of marketplace traffic after 3 months. | No traffic strategy: the store is live but nothing feeds it. | Ring-fence 5 to 10 percent of gross to acquisition (email list build, one paid channel, one content channel) and measure sessions weekly. | Set the acquisition budget as a line item in the P&L before launching the domain; keep the marketplace shop live until DTC sessions match its baseline. |
| DTC net margin is worse than the marketplace it replaced. | Fee savings were spent on discounts to seed reviews instead of on acquisition. | Hold RRP; move the discount budget into a documented acquisition line and evaluate CAC after 90 days. | Write a launch-quarter rule that forbids discounting on the new domain; review CAC and repeat rate quarterly against the fee savings you were meant to bank. |