Amazon vs DTC: unit economics side by side
The same product can be a strong business on one channel and a cash trap on another.
Channels change the economics
DTC gives the brand control over the customer relationship, merchandising, and data. Amazon gives access to high-intent demand and a trusted fulfilment layer. Neither is automatically more profitable. The answer lives in the full unit economics.
What DTC really costs
Beyond product cost, a DTC order carries payment processing, pick and pack, packaging, shipping subsidies, acquisition, returns, customer support, and the technology stack. The channel often produces stronger customer data and retention opportunities, but the first order may have a long payback period.
What Amazon really costs
Amazon compresses several costs into referral, fulfilment, storage, advertising, and account-level fees. Add inbound freight, removals, aged-inventory charges, returns, and the working capital required to keep stock available. The reported marketplace margin is rarely the complete margin.
- Model fees by product size and fulfilment tier.
- Include storage velocity and stock-out risk.
- Treat marketplace advertising as a channel cost, not an optional marketing line.
Choose the role of each channel
The useful question is not Amazon or DTC. It is what job each channel performs in the portfolio. Amazon may capture existing demand and open a market quickly. DTC may build the relationship, test offers, and increase lifetime value. The assortment, pricing, and inventory plan should reflect those different jobs.
Do not compare channel revenue. Compare contribution, cash cycle, and strategic value.