There's a belief in CPG brand building that has achieved full religious status. The catechism goes like this:
DTC is the holy channel. Amazon is the necessary evil. Retail is the validation. The goal — the entire point — is to acquire customers on Amazon and retail, then migrate them to DTC where you own the relationship and the margin.
I have sat through this pitch more times than I can count. A hundred board rooms. A thousand pitch decks. It has become so embedded in founder culture that questioning it feels like heresy.
Fine. I'll be the heretic.
Your preference for where customers buy is not your customer's problem. She doesn't care.
The woman who wants your product at 11 PM cares about getting it by Thursday. The guy comparing protein powders during his lunch break is thinking about reviews, price, and whether he trusts you — not your customer acquisition cost. The mother adding dog food to her weekly Subscribe & Save order has already moved on to the next item in her cart.
When you push customers away from where they naturally want to buy, you don't capture value. You create friction. And friction has a very specific name in commerce: lost sales.
I sat across from a founder last month — great product, real traction, strong reviews on Amazon — and she told me she was redirecting Amazon traffic to her Shopify site through social ads. I asked her what the conversion rate looked like on those redirected visitors. She didn't know. I asked her what her Amazon conversion rate was. Fourteen percent. I asked what Shopify was converting cold traffic at. She said two percent.
She was paying money to move customers from a 14% conversion environment to a 2% one. On purpose. Because someone told her she needed to "own the customer."
This is the kind of thing that makes me want to flip a table.
The Fee Math — On a Napkin
The DTC-first argument always starts with margin math, and it always sounds convincing until you actually run the numbers. Not the pitch deck version. The real ones.
Let me walk through this the way I'd sketch it at lunch.
Amazon, $30 product (typical CPG):
Referral fee: $4.50 (15%)
FBA pick and pack: ~$3.50
FBA storage: ~$0.50 (non-Q4 average)
Advertising at 15% TACOS: $4.50
Amazon total: $13.00 — 43% of revenue
DTC, same $30 product:
Payment processing: $1.17 (Stripe/Shopify, ~3.9%)
Shopify subscription allocated per order: $0.50
Shipping (free shipping threshold, USPS/UPS ground): $6.50
Packaging and handling labor: $1.50
Customer acquisition (Meta/Google, $25 CAC, 2% conversion): $8.00
Returns processing (8% rate, $5 per return): $0.40
Customer service allocated per order: $0.75
DTC total: $18.82 — 63% of revenue
Look at those numbers again.
The DTC channel — the one every founder believes is their margin fortress — costs $18.82 per order. Amazon costs $13. The gap is almost six bucks a unit.
"But my CAC is lower than $25." Maybe. If your brand has killer organic social and a big email list, blended CAC might be $12–$15. That brings DTC down to $14–$17. Still more than Amazon in most cases. And it ignores the ceiling — organic channels don't scale infinitely. When you try to grow DTC revenue 50%, marginal CAC climbs because you've exhausted your warmest audiences. I've watched this movie play out with dozens of brands. The first $2M in DTC revenue comes cheap. The next $2M costs twice as much.
"But I own the customer data on DTC." True. That data has value. If your email marketing drives a 20% repeat purchase rate — which is above average for CPG — the lifetime value uplift is real but bounded. Stack it against the structural cost disadvantage and the math is a lot closer than the narrative suggests.
"But Amazon can cut me off." This one's legitimate. Amazon is a platform, and platforms have power. But the answer to platform risk isn't fighting your customers' behavior. It's diversifying channels while letting each one do what it does best.
What Each Channel Is Actually Good At
The strongest brands I work with don't argue about which channel is "best." They've figured out what each channel is best at.
Amazon: Discovery and Conversion Engine
200+ million Prime members in the U.S. More product searches start on Amazon than on Google. The conversion infrastructure — reviews, Subscribe & Save, one-click purchasing, Prime shipping — is unmatched by anything.
Amazon's job is to be where customers find you for the first time and convert with minimal friction. Despite the fees, it's the single most efficient customer acquisition channel in eCommerce because people show up already wanting to buy. You're not paying to create demand. You're paying to capture demand that already exists.
The brands in Neato's portfolio — illy, Wiley Wallaby, Earth Animal, TropiClean, and others — use Amazon as their primary conversion engine. We become seller of record, manage inventory and advertising, optimize for the platform's specific dynamics. Reliable, scalable revenue that funds growth everywhere else.
DTC: The Relationship Channel
Your DTC site is not your best acquisition channel. It is your best relationship channel. Big difference.
The ideal DTC customer already bought your product somewhere — on Amazon, at retail, through a friend's recommendation — and wants more. They don't need convincing. They don't need reviews. They need a reason to buy direct: exclusive products, subscription discounts, loyalty programs, content, community.
DTC is great at subscription programs with better margins than Amazon S&S (you control the discount structure). Exclusive SKUs that differentiate the direct channel without price competition. Content marketing that builds affinity. Customer data for email, SMS, personalized marketing. Bundling and customization that aren't possible on marketplaces.
DTC is terrible at acquiring net-new customers efficiently — CAC almost always exceeds Amazon's effective acquisition cost. Converting cold traffic — 2–3% versus Amazon's 10–15%. Competing on shipping speed and convenience — Prime set expectations you simply can't match.
The best DTC plays I've seen don't steal customers from Amazon. They give existing fans a reason to add DTC. The customer buys her first bag of dog food on Amazon. Loves it. Visits the brand's site for feeding guides and community content. Signs up for the DTC subscription because it offers an exclusive flavor and 20% off. Now she's buying on both channels and the brand's total customer value has doubled.
Retail: Credibility and Discovery
Physical retail — Target, Whole Foods, PetSmart, Sprouts — does something neither Amazon nor DTC can replicate. It proves you're real.
For emerging CPG brands, retail placement is a credibility signal. It tells customers: "This product was good enough for Whole Foods' category buyer to put on the shelf." That credibility radiates across every other channel. Amazon conversion rates go up when customers recognize you from store shelves. DTC traffic increases when you go from "internet thing" to "I saw it at Target."
Retail also drives impulse discovery. The customer in a pet store for dog food notices a new treat brand on the endcap. She wasn't searching for it. She found it through physical proximity — a mechanism digital channels literally cannot replicate.
The margin math on retail is often the worst of the three (wholesale pricing, slotting fees, promotional requirements). But the credibility and discovery value subsidize those margins in ways that never appear on a unit economics spreadsheet.
The First Purchase Doctrine
Here's the mindset shift I want every brand leader to internalize:
Stop optimizing for which channel gets the first purchase. Optimize for making the first purchase happen — period. Anywhere.
The first purchase is the hardest one. The customer doesn't know you. Doesn't trust you. They're comparing you against alternatives and the option of buying nothing. Every unit of friction you add — "don't buy on Amazon, come to our website instead" — reduces the probability of that first purchase happening at all.
Once it happens, the game changes completely. The customer has tried your product. They have an opinion. If it's good, the relationship has started. Now you can move them across channels, upgrade to subscriptions, deepen engagement.
But you can't deepen a relationship that never started. And relationships don't start when you tell someone to go somewhere else.
Patterns That Actually Work
Across brands we work with at Neato, I keep seeing the same winning patterns.
Amazon-first, DTC-second. Brand launches on Amazon, builds reviews, organic rank, Subscribe & Save subscribers. Once there's traction and recognition, launch DTC with exclusive products and a loyalty program that gives existing customers a reason to add a second channel. Amazon funds growth. DTC captures depth.
Retail + Amazon pincer. Brand secures retail distribution for credibility and in-store discovery, then uses Amazon as the conversion channel for customers who prefer online. Retail builds awareness. Amazon captures conversion. TACOS compresses on Amazon because retail is doing brand-building work for free.
TikTok → Amazon → DTC funnel. Brand uses TikTok Shop for discovery and awareness, captures resulting Amazon branded search, builds DTC relationships with repeat customers through email and exclusive offers. Three channels, three jobs, zero cannibalization.
Notice what's absent in every pattern: nobody is telling the customer where to buy. The customer chooses. The brand makes sure every channel is ready to convert.
The Channel Conflict Myth
"If I'm on Amazon, I'm competing with myself."
I have heard this so many times. This belief has killed more growth than any actual competitor. And it rests on a misunderstanding of how customers behave.
Channel conflict assumes a fixed pie — every dollar on Amazon is a dollar lost from DTC. The data consistently shows the opposite. Brands that launch on Amazon see their DTC revenue grow, not shrink.
Why? Amazon is a discovery engine. Millions of customers find brands on Amazon they'd never have encountered through a Facebook ad or Google search. Once they discover you, a meaningful percentage seeks out your website for more info, exclusive products, subscriptions.
Works the other way too. Brands with strong DTC presence see higher branded search on Amazon. Customers who hear about you through content, social, word of mouth often convert on Amazon because that's where they're comfortable buying.
The channels don't compete. They compound. Every point of presence makes every other point of presence more effective. When Neato takes over Amazon operations for a brand with strong DTC, their DTC revenue doesn't decline. It typically grows 10–20% within six months because the incremental Amazon presence creates awareness that feeds back into direct channels.
Brands that fear channel conflict treat channels as competitors. Brands that embrace multichannel treat channels as force multipliers. The second group grows faster. Every time.
The Ownership Objection
"But I don't own the customer on Amazon."
I hear this more than anything, and it's half right. You don't get the email. You don't control checkout. You're subject to Amazon's rules and fees.
But ownership is a spectrum. You own your brand on Amazon. Your reviews. Your listing content. Your advertising strategy. Your Subscribe & Save subscriber base — recurring revenue with no ad cost. You own the brand equity that compounds through every positive customer experience.
What you don't own is the email address. That's a real limitation. But the response isn't to herd customers away from the platform where they want to buy. It's to build a DTC channel that earns the email from customers who are already fans — not to shove cold prospects through a higher-friction path so you can add them to a list they'll unsubscribe from anyway.
The Data
The research on this is not ambiguous. Harvard Business Review found that multichannel customers spend 4% more in-store and 10% more online than single-channel customers. McKinsey's retail research — customers using three or more channels spend 250% more than single-channel customers.
On Amazon specifically: brands with retail presence see 15–30% higher conversion rates than online-only brands in the same category. The shelf acts as a trust signal that converts into digital sales. Brands running coordinated TikTok Shop and Amazon strategies see 25–40% lifts in Amazon branded search, which translates directly into organic revenue and TACOS compression.
The brand constraining itself to one channel isn't just limiting distribution. It's limiting the compounding effects that multichannel creates. Every channel reinforces every other channel. The customer who sees your product at Target, watches a TikTok review, and buys on Amazon has been touched three times — and that customer's lifetime value is multiples higher than someone acquired through a single Facebook ad.
The math isn't complicated. It's just uncomfortable for founders who've built their identity around being a "DTC brand."
Being a DTC brand is not a strategy. It's a constraint dressed up as an identity. Drop the constraint. Be a brand. Sell everywhere your customers want to buy.
The Uncomfortable Truth
DTC-first was a venture capital narrative. Built during a window when Meta CACs were low, organic social reach was high, Shopify made launching a store trivially easy, and investors valued revenue growth at any cost.
That window is closed.
Meta CACs have more than tripled since 2020. Organic social reach has cratered. iOS privacy changes gutted the targeted advertising infrastructure DTC brands depended on. The brands that thrived in 2018–2021 did so in conditions that no longer exist.
Amazon hasn't gotten cheaper either. But its core advantage — customers arrive with purchase intent — hasn't changed. You're not paying to create demand. You're paying to capture it. The efficiency gap between demand creation (DTC) and demand capture (Amazon) has only gotten wider as digital advertising has gotten more expensive.
The smartest brand leaders I talk to have stopped treating channels as identity statements. They don't call themselves "DTC brands" or "Amazon brands." They call themselves brands. Full stop.
Then they let each channel do its job. And they meet customers wherever those customers want to buy.
That's not a compromise. That's commerce.
Make a great product. Make it available wherever your customer wants to buy it. Make the first purchase as frictionless as possible. Then build the relationship from there.
Stop directing. Start serving.
Talk to Neato about building an Amazon channel that compounds alongside your DTC and retail presence — not against them.
Anthony Connelly is CEO at Neato, where he leads the company's mission to accelerate brand growth on Amazon through Neato's 2P partnership model. Neato is a 2P eCommerce acceleration partner — we buy inventory, become seller of record, and grow brands on Amazon with certainty.
