Why Most D2C Brands Slow Down After Initial Success on Instagram

Harshita Bhatronji
Jul 29
2 min read

Many young D2C founders follow a similar path:

Source or white-label a good product
Build a brand page on Instagram
Run ads, get leads, close sales via DMs

It works—for a while. But eventually, growth starts to slow down. Here’s why, with research-backed insights:

The Plateau: Why Growth Stalls

Ad Costs Skyrocket

Digital ad costs for D2C brands have been rising 20–30% per year, driven by increased competition on Meta and Google.
The more brands that target the same audience, the higher the cost to get seen.

Customers Don’t Return

Many D2C brands struggle with retention: the average D2C retention rate is just 28%.
Worse, 60% of revenue comes from return customers, so low retention means unstable growth.

Amazon Commissions Eat Margins

Major platforms like Amazon have hiked seller commissions—in some categories, they’ve doubled.
This directly squeezes D2C margins and forces founders to rethink profitability.

Brand Visibility Drops When Ads Stop

Instagram and Facebook are crowded with D2C brands, making it hard to stand out organically.
Most audiences are acquired through paid ads—when ad spend stops, so does visibility.

“It is every founder’s dream to acquire more new customers, faster. But in reality, digital CAC is only rising. You are in a race to beat rising CPMs on Meta & Google, and that’s a battle that’s hard to win at scale.”— Dhruv Toshniwal, CEO, The Pant Project

The Offline Access Problem

“Where can I buy your product near me?”

Without a physical retail presence, even loyal customers lack easy access hurting repeat sales and brand trust.

Digital-Only Brand = Growth Ceiling

Brands that stay online-only eventually hit a wall.
Expanding to retail shelves gives access to new audiences, builds trust, and makes it easier for customers to try and rebuy products.

The Path Forward: Going Beyond the Algorithm

At Brandport, we believe the next phase of growth lies on the retail shelf not just in the algorithm and ad manager.

Omnichannel Presence Builds Brand Endurance

D2C brands like Warby Parker have seen over 40% of net revenue come from physical stores after scaling beyond digital-first strategies.

Diversification Mitigates Margin Pressure

An omnichannel approach (mix of online + offline) helps maintain better margins and reach customers wherever they are.
Your product deserves shelf space.Your customers deserve access.Your brand deserves to be seen—even when the ad stops.

Take the Offline Leap

Over the coming weeks, Brandport will share insights, case studies, and strategic support for D2C founders ready to expand offline without the chaos.

Follow Brandport for actionable steps to help your digital brand turn customers’

“Where can I find you?” into

“Right here on the shelf.”