Psst. Check this out. I’ve got a $5 billion secret for you.
To explain what it is, let me start by showing you three companies:
Casper, Warby Parker, and Dollar Shave Club.
A few years ago, they were tiny startups, worth next to nothing.
But as I write this column for you, their combined value is nearly $5 billion — and they’ve made their early investors a fortune.
So today, I’ll share the secret to their success…
And then I’ll show you how to use this secret to make a fortune of your own.
The $5 Billion Secret
Ready for the secret to success of these three companies?
They eliminate the middleman.
In other words, they sell their products to consumers directly.
Casper sells mattresses, Warby Parker sells eyeglasses, and Dollar Shave Club sells razors — and they do so without using distributors or retailers like Amazon.
That’s why this type of company is called “direct-to-consumer,” or “DTC” for short.
Advantages for Businesses and Consumers
The DTC strategy offers many advantages to a business and its customers.
For example, for a business, removing the middleman creates a more personalized relationship with its customers — and it also helps it slash costs.
And for customers like us, those savings get passed along in the form of lower prices!
These benefits help explain why DTC startups are quickly disrupting some of the world’s biggest industries:
- Casper grew to several hundred million dollars in annual sales and a $1 billion private-market valuation. It’s putting legacy mattress brands out of business.
- Warby Parker is displacing incumbents like Luxottica, the owner of Ray-Ban, Persol, and Oakley. It was recently valued at $3 billion.
- And after signing up more than 3 million customers to its razor-delivery service, Dollar Shave Club was acquired by Unilever for nearly $1 billion.
There’s Never Been a Better Time for DTC
It’s never been easier to launch and grow a DTC business.
For example, it’s simple and inexpensive nowadays to set up a web store through an ecommerce platform like Shopify.
And once its store is set up, a company can attract its target market at scale by using advertising platforms like Google and Facebook.
So, are you ready to pocket some DTC profits for yourself?
Five DTC Deals to Explore Today
Thousands of new DTC businesses are just getting started.
Here are a few you can invest in today for as little as $100.
- TapRm is an online platform that enables any beer brand to sell DTC. It’s already on an annual run rate of $5 million, and its year-over-year growth rate is 670%.
- OTIS Dental. Grind your teeth at night? You’re not alone. Otis uses a DTC business model to make and deliver custom “night guards.”
- Cannabox is the first company that sold a monthly subscription box of cannabis accessories. And it’s already brought in $11.5 million in sales.
- BAOBAB sells what it calls a “Perfect Polo” shirt. 35% of new customers come back for another purchase, and 87% of those customers buy multiple shirts.
- Primal Life Organics makes organic skincare products. Its annual sales are nearly $5 million, and it’s already profitable.
Keep in mind:
I’m not recommending that you go and blindly invest in these startups.
These are early-stage ventures, so you need to do substantial research before making an investment decision.
But if you’re interested in profiting from the DTC trend, these are a great place to start your search!
Please note: Crowdability has no relationship with any of the startups we write about. We’re an independent provider of education and research on startups and alternative investments.