The original DTC companies like Casper, Warby Parker and Harry’s offered great products that were priced higher than wholesale, but less than retail. When competitors and ad rates went up that compressed their margins. I think there’s a new DTC strategy. Elevated products at elevated prices.

True Classic, Fresh Clean Tees (now Fresh Clean Threads) and Blissy are three direct to consumer (DTC) businesses that turned everyday normal products into an elevated product, resulting in astounding success. Like crazy.

The blueprint for these businesses is to take a normal product that is inexpensive to produce and improve it enough to allow a substantial marketing budget. Once you have that and can acquire customers at a profit you turn the dial up as much as you can and grow the business.

True Classic and Fresh Clean Threads did this with t-shirts. True Classic pitch was a comfortable, soft fabric and a fit that was tight around the arms and chest and loose around the torso. Fresh Clean Threads pitch was high quality men’s basics at a reasonable price. Blissy did this with silk pillowcases that were better for your skin and hair than their archaic cotton cousins were. The prices are what are impressive. Right now on sale at True Classic you can get 3 tees for $90 CAD. Fresh Clean has 3 on sale for $99 CAD and Blissy… One silk pillowcase is normally $80 USD!

Now I’m not saying these aren’t quality products, but they definitely have margin in them for aggressive marketing spend and the revenue results have been impressive.

True Classic launched in 2019 with a $3,000 investment, sells $150 million a year ($250 million over three years) and is worth a reported $700 million. In four years. But here’s the key. Of the $150 million in revenue, it’s estimated that $57 million was spent on ads (link). It’s reported they spend the majority on meta’s platforms… around $100,000 per day! How many product companies are planning to spend 38% of revenue on advertising? The other key for True Classic is that they have 50 employees (2nd link) which keeps opex manageable. Building ad spend into the expense and scalable systems was key to their success.

Now Fresh Clean Threads is impressive as well. It started in 2015, built to $500,000 by 2017, $5 million by 2019 and in 2020 with the pandemic it took off and reached $20 million in revenue. In 2021 it sold $45-50 million.

Blissy I think is the diamond. Unlike clothes that may not fit as expected and be returned they started by selling a high quality pillowcase. Specifically a Grade 6A 22 momme silk pillowcase. For $80 USD! If you look on Alibaba you can buy a similar product for around $10 so there’s definitely room for a significant marketing budget. Their success was instant and spectacular. They hit $10,000 revenue in the first month, over $10 million in the first year and within three years had sold $100 million. Their sku’s did increase with different sizes, colors and a nighttime mask. But all of these products are easy and pretty much guaranteed to fit.

So what lessons can you take out of these three pandemic DTC darlings?

Build marketing into your plan from the start. When you launch a new company no one is going to notice. So budget for a significant ad spend and try and focus on your cost of customer acquisition. Once you have an ad approach that works, double down and stay with it.

Don’t compete solely on price. If you do it’s a race to the bottom. Compete on a higher quality product and build a brand.

You don’t need to reinvent the wheel. A better fitting, soft t-shirt. A pillow that’s better for your skin and hair. These are easy things to communicate to someone in 3 seconds. So look for a common product, a pain point and build out an elevated product. A better solution.

So what are some potential ideas?

• Socks that breathe better so your feet sweat less. Or incorporate silver threads for odor reduction.

• A better facecloth for your beauty routine.

• A luffa that is better for the environment.

• Jeans in sizes that aren’t available in retail stores. Width and lengths.

• Better sheets/blankets for babies.

• A thinner undershirt for men. Seriously, why are the v-neck ones the same weight as a crew neck? They should be as light as a muscle t with sweat catching tech in the armpits/back.

• A seven pack of pillowcases. We change our clothes every day, but we put our face on the same case for a week at a time?

• Better kitchen utensils. I think the ultimate chefs knife could be a great DTC product. Great gift idea too.

• Flip flops. Now hear me out. Rainbow makes amazing ones. Where’s the DTC brand in this space? Great lifestyle product.

• Umbrella. Most of the ones we have are no good, but there are amazing ones out there. Someone could create a great brand in this space and market to geographies with upcoming rain.

• I have one more idea. But I’m going to keep that one a bit closer right now as a partner and I are looking at starting a business around it.