B2C vs. D2C: Key Differences and How to Choose (2026)

When you sell online, you can either offer your products directly to customers or work through third-party channels. Both fall under the business-to-consumer (B2C) umbrella, but the direct-to-consumer (D2C) model gives you full control over the customer experience—from how people discover your brand to how they buy, receive, and engage with your products.

D2C has grown quickly as more founders look for ways to own their audience and build stronger customer relationships. In the US alone, D2C sales are expected to reach $239.75 billion in 2025, making up close to 20% of total retail ecommerce sales. 

More brands are embracing D2C because it lets them test new products faster, run more targeted marketing campaigns, and keep a bigger share of their margins.

Traditional B2C retail is still a powerful path, especially if you want to tap into the reach of online marketplaces or established retailers. But each model comes with its own approach to customer acquisition, marketing, and growth.

Here’s how D2C and B2C compare, and what to consider if you’re choosing between them.

What is B2C?

B2C (business to consumer) is a commerce model where companies sell products or services directly to individual shoppers. It covers everything from online stores and marketplaces to social commerce and brick-and-mortar retail—any channel where a business sells straight to the end consumer.

B2C businesses can reach customers through many different touchpoints. Some sell through their own ecommerce sites, while others use large online marketplaces like Amazon or AliExpress to expand their reach. 

The B2C business model often relies on physical retail stores like grocery chains, clothing retailers, electronics shops, or hardware stores too. Brands can sell through smaller boutiques as well. 

The B2C model is often contrasted with B2B, or the business-to-business model, where one business sells to another business.

Social media platforms like Instagram let brands showcase products and enable customers to buy directly without leaving the app.

Together, these channels give B2C companies flexibility in how they attract customers, build brand recognition, and scale sales.

What is D2C?

D2C, meaning direct to consumer, is a business model where companies sell their products or services straight to end customers without relying on third-party retailers or marketplaces. It sits within the broader B2C category, but gives brands full control over sales, marketing, and customer relationships.

For instance, when you sell products directly from your website’s ecommerce store, you bypass external sales channels and have a direct relationship with shoppers. To sell directly to end consumers, D2C companies may partner with an ecommerce platform like Shopify to create an online store and set up payment processing.

The D2C business model also includes physical stores owned and operated by the brand itself. Unlike department stores, big-box stores, and multibrand stores that feature goods from many different companies, D2C stores only sell the brand’s own products. D2C stores give the company the opportunity for direct interaction with customers.

B2C vs. D2C

• Distribution channels
• Brand control
• Data and customer insights
• Customization and personalization
• Speed and flexibility

If you’re evaluating the difference between B2C and D2C, consider factors like distribution, data, and margins.

Key differences between the models, ranging from the customer experience to operational costs, include:

Distribution channels

• B2C. B2C businesses may rely on distribution channels such as retail stores and online marketplaces like Amazon. You can also sell products via social media platforms like Instagram and TikTok, which operate their own online marketplaces.
• D2C. The D2C model cuts out intermediaries and sells directly to consumers through ecommerce websites and retail stores, giving sellers more control over the customer experience.

Brand control

• B2C. Companies in a B2C model often have less direct control over the customer relationship. Typically, customers will interact with the online marketplace or retailer, not the various product makers.
• D2C. This model allows for a stronger, more direct relationship between the brand and consumers. Businesses have more control over their brand messaging, customer interactions, and feedback, fostering a deeper connection.

Data and customer insights

• B2C. In traditional B2C channels, much of the customer data sits with intermediaries like marketplaces or retailers. Brands often receive limited information—usually just high-level sales reports—making it harder to understand who their customers are, how they shop, and what drives repeat purchases.
• D2C. The D2C model gives merchants direct access to rich, first-party data. Because shoppers buy through a brand’s own website or owned retail store, companies can track specific behaviors that fuel smarter decision-making. 

Examples of this data include:

• Customer demographics: age, location, purchase history
• Browsing behavior: which product pages shoppers view, how long they stay, where they drop off
• Acquisition insights: which channels (social, email, search) convert best
• Engagement patterns: email open rates, SMS response rates, loyalty program activity
• Product trends: top-selling items, abandoned products, repeat-purchase frequency

This level of visibility directly shapes business strategy. Merchants can run more precise D2C marketing campaigns, improve product development based on real demand, and personalize onsite experiences, like recommending relevant items or offering targeted discounts to high-value customers.

Customization and personalization

• B2C. This model may focus on the customer journey from a retailer’s perspective. Interactions may be personalized, but these revolve around the store—not necessarily the maker of the products sold there.
• D2C. The D2C model allows greater product and service customization and personalization based directly on customer preferences. Companies can use D2C insights to create targeted marketing campaigns to increase sales.

Speed and flexibility

• B2C. Decision-making and adapting to market changes might be slower because of the multiple parties in the supply chain.
• D2C. D2C offers greater control and quicker responses to market trends or customer demands. This is due to the streamlined nature of most D2C operations.

The rise of hybrid D2C-B2C models

Many brands are embracing a hybrid D2C-B2C model, blending direct sales with retail and marketplace partnerships. Rising customer acquisition costs and the shift toward first-party data have pushed many established brands to invest more heavily in direct channels.

This approach lets businesses enjoy the best of both worlds: the reach of traditional B2C channels and the data, margins, and control that come with D2C.

Many established B2C companies are also building out direct channels to deepen customer relationships and access first-party data. 

A strong example of this shift is Nike. The brand expanded its D2C presence through Nike.com and its mobile apps while still working with select retailers. This approach gives Nike more control over its brand experience, while retail partners help the company stay visible and reach new audiences.

Why hybrid works

A hybrid model lets brands combine the strengths of both approaches:

• Reach and visibility through retail and marketplace partners
• Data ownership and customer insight through direct channels
• Higher margins on D2C sales
• Brand consistency across touchpoints
• Product testing opportunities through D2C before wider retail rollout
• Diversified revenue that helps stabilize growth

How to build a hybrid D2C-B2C model

Brands can approach this model by aligning each channel’s strengths:

1. Use D2C to learn and optimize. Direct channels offer richer data. Use it to understand customer behavior, test new products, and personalize marketing.
2. Use B2C channels to scale. Retailers and marketplaces help you reach new audiences and build brand awareness faster.
3. Create consistent pricing and messaging. Keep product positioning aligned across all channels to maintain customer trust.
4. Segment your assortment. Offer exclusives or early releases on your D2C site while letting B2C partners carry your core catalog.

For example, WHO IS ELIJAH manages both its D2C and B2B channels through Shopify, which helped the brand drive 400% growth in D2C revenue and achieve 50% year-over-year international B2B growth in 2024.

Another example is Tony’s Chocolonely which brought its D2C, B2B, and reseller operations together on a single Shopify build. The result: a site that loads 2.5-times faster and double-digit overall growth, including a 70% jump in the US market.

Pros and cons of B2C

The B2C sales model comes with notable benefits and drawbacks. Here’s a rundown:

Benefits of B2C

• Broad market reach. B2C models can reach a huge consumer base. With a multiplatform approach across traditional retail outlets, ecommerce platforms, and marketplaces, businesses can tap into a broad audience, potentially increasing sales and brand visibility.
• Established distribution channels. Going with a large platform can allow smaller businesses to tap into shipping, warehousing, and other benefits, which can help contain costs. Online marketplaces such as Amazon also know a lot about their customers’ buying habits, which you can leverage when selling via their platforms.
• Brand loyalty: Successful B2C companies often build strong brand recognition and loyalty among consumers, who make repeat purchases.

Limitations of B2C

• Reduced control over customer relationships. The B2C model limits direct interaction with customers because retailers and marketplaces sit between the brand and the buyer. This reduces control over the experience and makes it harder to build long-term loyalty.
• Dependency on intermediaries. B2C sellers rely on retailers and marketplaces, which can lower margins and restrict how the brand is presented. Policy or algorithm changes can also disrupt sales and affect customer trust.
• Competition and price sensitivity. B2C marketplaces are highly competitive, since shoppers can compare prices instantly. This creates pricing pressure where small discounts compound over time, and leads to a race-to-the-bottom dynamic where only the lowest-priced options stand out. Prepare to offer highly competitive prices when selling products in these marketplaces.
• Higher acquisition costs for D2C brands. Direct-to-consumer channels often come with higher customer acquisition costs due to rising ad prices. This makes it more expensive to bring new shoppers into the funnel.
• Stronger need for retention in D2C. Because acquiring customers is costly, D2C brands rely heavily on retention strategies—such as email, SMS, loyalty programs, or subscriptions—to drive repeat purchases and increase customer lifetime value.

Pros and cons of D2C

The D2C approach offers significant advantages in terms of customer relationships and control over branding. It also poses challenges related to initial setup costs, target market penetration, and logistical operations. 

Here are notable benefits and D2C challenges:

Benefits of D2C

• Direct customer relationships. The D2C model offers businesses a direct and intimate relationship with consumers. This enables better understanding of customer needs, preferences, and feedback, which can boost brand value and customer loyalty.
• Greater control over branding and messaging. Direct-to-consumer brands have almost complete control over their branding, marketing, and messaging. With more control comes stronger brand identity and more opportunities to provide personalized service to end users.
• Data collection and insights. D2C models lend themselves to better customer insights because you can study customer behavior on your own website, rather than rely on a third-party marketplace for user data. This valuable data can give you a competitive edge in everything from pricing to digital marketing because you gain firsthand knowledge about what effectively sells products on your website or in your stores.

Limitations of D2C

• Infrastructure and overhead costs. Setting up a D2C channel requires investment in ecommerce infrastructure, marketing tools, and fulfillment operations. Building and maintaining these systems can be costly and time-consuming, especially for smaller brands.
• Market reach and competition. D2C brands often struggle to reach large audiences without the built-in traffic of retailers or marketplaces. Paid acquisition is also more expensive today. Rising ad costs make it harder for new brands to stand out, especially when consumers are seeking lower prices from discount retailers.
• Logistical complexities. Managing inventory, shipping, and customer service in-house adds operational pressure. As D2C brands scale, many need third-party logistics partners to keep fulfillment consistent and cost-effective.
• Higher acquisition costs for D2C. Attracting new customers directly has become more expensive as advertising costs climb. This can put pressure on margins and slow early-stage growth.
• Greater importance of retention. Because acquisition costs are high, retention becomes essential for D2C success. Loyalty programs, personalized email and SMS, and strong post-purchase experiences help drive repeat purchases and improve customer lifetime value.

How to choose between B2C and D2C

Choosing between D2C and B2C depends on your business model, resources, and long-term goals. Both approaches can be effective, but each works best under different conditions. Use the following factors to decide which model aligns with your strategy.

Key factors to consider

• Business resources. D2C requires investment in ecommerce, marketing, and fulfillment. B2C is often easier to start with because retailers and marketplaces already have traffic and distribution.
• Product type. Unique, niche, or customizable products often perform better in D2C channels. Broad, commodity-style products may do well in B2C retail environments where comparison shopping is common.
• Profit margin goals. D2C typically offers higher margins because you avoid retailer markups, though acquisition costs may be higher. B2C can drive volume, but at lower margins.
• Brand control needs. If owning the customer experience, branding, and packaging matters, D2C gives you more control. B2C relies on retailers and marketplaces, which limits how your brand is presented.
• Customer data priorities. D2C provides richer first-party data that can shape marketing, product development, and retention strategies. B2C offers less visibility into customer behavior.
• Speed to market. Marketplaces and retail partners can help new brands scale quickly. D2C takes longer to build awareness, but supports stronger long-term relationships.

The choice isn’t always either/or, with many established B2C brands now using a hybrid model to combine reach and control. For example, Nike strengthened its D2C presence through its website and apps while still selling through select retailers. This helped the company increase margins and gather deeper customer insights without losing retail-scale visibility.

Transitioning from B2C to D2C

If you already operate in a B2C model and want to add or expand D2C, evaluate these areas first:

• Customer readiness. Are customers already searching for your brand online or looking for a direct buying option?
• Internal logistics. Do you have the systems to manage fulfillment, returns, and customer service directly?
• Marketing capability. Can you support customer acquisition and retention with email, SMS, paid ads, and content?
• Product assortment. Decide which products should be exclusive to D2C, which should be offered through retail partners, and which should be shared across both.

How Shopify supports the D2C model

Shopify helps brands build and scale D2C channels with:

• All-in-one ecommerce tools for storefront creation, checkout, and payments
• Built-in marketing features like email, automation, and audience segmentation
• Integrated fulfillment options through Shopify Fulfillment Network partners
• Analytics and reporting that help you understand customer behavior and improve retention
• Omnichannel tools that allow brands to sell D2C while continuing to use retail partners, marketplaces, and social channels

Whether you choose B2C, D2C, or a hybrid route, Shopify gives you the flexibility to grow your business in the direction that makes the most sense.