Is Now a Good Time to Start a DTC Brand?

The DTC sector in 2025 is split down the middle. Legacy players like Warby Parker and Allbirds are retrenching. Warby is killing its famous Home Try-On program to funnel customers into its nearly 300 retail stores—because most people using HTO already lived near one (Retail Dive). Allbirds posted a 23% revenue drop in Q2 (to $39.7M) and is closing stores while shifting to third-party distribution (FashionUnited).

Meanwhile, breakout upstarts are sprinting. Quince—a brand built on TikTok virality and factory-direct efficiency—is raising $200M at a $4.5B valuation (BoF). It’s proof that while the DTC gold rush is over, disciplined operators can still mine new seams.

So: is now a good time to start a DTC brand? The answer is complicated. It’s the hardest environment in years—but also one of the best for founders who play the new game.

The End of Cheap Acquisition

If you’ve noticed your Meta ROAS slipping, you’re not alone. Privacy changes and auction pressure have pushed CAC to record highs. As Digiday put it:

“Acquisition costs have been rising for a while and reaching peak levels, while the return isn’t quite there and consumer confidence is more unpredictable” (Digiday).

Brian Wong, co-founder of Feel Goods, said it bluntly:

“We’ve heavily scaled back on paid ads… Now we do a lot of it ourselves in-house, and TikTok has been a huge driver of awareness and revenue” (Modern Retail).

That’s the story for new entrants too. If you’re starting now, you can’t build on Meta alone. Founders are leaning on organic TikTok, community UGC, and referral loops. More budgets are flowing offline: 29% of DTC brands now put 41%+ of their spend into OOH or in-store marketing, up from just 4% a year ago (Digiday).

Retention is non-negotiable. The best operators obsess over lifetime value and use tools like LiveRecover to rescue abandoned checkouts via real human SMS, then extend that into retention loops. When CAC is punishing, recovering lost revenue is the easiest ROI you’ll ever find.

From Clicks to Bricks

The days when “pure DTC” was a badge of honor are gone. Omnichannel is the default.

Warby’s Home Try-On pivot shows that digital-native brands need physical touchpoints when they scale. Allbirds’ contraction proves the opposite lesson: overextending into stores without profitable growth is just as dangerous. The middle ground is smarter: Shopify at the core, Amazon to capture search intent, and selective wholesale or pop-ups to extend reach.

As Lindsey Carter put it in her founder notes:

“If I were starting a DTC brand today, I’d build my distribution plan before my first product sample” (Substack).

Investors agree. Many VCs now want to see omnichannel proof points before cutting checks. Even small pilots with Target, Amazon, or boutique wholesale can de-risk growth in their eyes.

Categories That Win (and Ones That Struggle)

Some categories are uphill battles in 2025. Apparel and furniture? Brutal unless you’ve got high AOV and relentless product drops.

Consumables, on the other hand, are thriving. Feel Goods shipped 4M+ servings in three years, with subscriptions driving most sales (Modern Retail). That kind of repeat revenue makes investors lean in.

Quince proves that even in saturated apparel, efficiency wins. Its factory-to-consumer model cuts out warehouses and middlemen, letting them scale at margin while keeping prices low (BoF).

Rule of thumb: if your product doesn’t repeat naturally, build mechanisms to create repeat behavior—drops, bundles, loyalty, or subscriptions. Otherwise, CAC math collapses.

TikTok Is the New Growth Engine

Social commerce has gone from experiment to core channel. TikTok Shop now drives two-thirds of social commerce GMV, and nearly 1 in 3 U.S. TikTok users have made a purchase in the past 12 months (NetInfluencer; Exploding Topics).

Founders are acting like creators, posting lo-fi TikToks multiple times a week. Influencers are turning into founders, flipping their audiences into built-in distribution. The brands winning on TikTok treat it as a channel in its own right, not just a top-of-funnel awareness boost.

Quince’s rise shows what happens when social virality meets supply chain discipline. They didn’t just win attention—they converted it into margin-positive scale.

Investors Want Profit, Not Pageviews

Funding has cooled. Global DTC deals fell 7% YoY in 2024, with total dollars down about 18% (Quick Market Pitch). The money is still there, but it flows only to brands that can prove profitability and omnichannel potential.

As Quick Market Pitch summarized:

“The funding landscape has shifted from growth-at-all-costs to unit economics” (Quick Market Pitch).

Investors aren’t wowed by Instagram followers anymore. They want CAC payback periods, contribution margins, and subscriber retention data. Brands that can say “50% of customers buy 3+ times a year” will get the meeting; brands that can’t will get ghosted.

As Taylor Lagace put it on X, founders obsessing over attribution tools are missing the bigger picture: “What does my bank account actually say?” (X)

The Verdict: DTC 2.0 Is Here

So, is now the time?

Yes—if you play by the new rules. Start on Shopify, but plan for omnichannel. Choose categories with repeat revenue baked in. Treat TikTok and creators as core distribution. And above all, focus on retention and profit per customer—not just top-line growth.

No—if you’re banking on 2015 playbooks. Meta arbitrage, growth at all costs, and pretty brand decks won’t cut it.

The gold rush is over. But disciplined founders willing to mine smarter—through efficiency, creativity, and customer obsession—can still strike gold.

Subscribe for weekly DTC insights.