Direct-to-consumer brands are bought and sold on a number most agency proposals never mention: contribution margin after product cost, shipping, payment fees and returns. That number decides what you can pay to acquire a customer, and therefore what any agency can plausibly promise. A brand that does not know it cannot evaluate a proposal, and an agency that does not ask for it is proposing against a constraint it has not seen.
Know the number before you take the meeting
Contribution margin per order after product, shipping, payment processing and returns, and then the same figure over a customer's first year if repeat purchase is real for your product. That is the budget for acquisition. Agencies that ask for it in the first conversation are working on your problem; agencies that lead with creative and channel mix are working on theirs.
Discount is a marketing cost that lands somewhere else
Revenue reported by an agency is usually gross of the discount used to produce it, and that discount is charged to gross margin rather than to the marketing budget, so it never appears in the agency's numbers. Require reporting net of discount, or with discount shown separately. This single reporting change reverses which campaigns look successful more often than anything else in this category.
Attribution overlaps and everybody claims the same order
The email platform, the paid social platform and analytics will each claim the same sale, and the sum of platform-reported revenue routinely exceeds actual revenue. Agree the source of truth, the attribution window, and whether incrementality will be tested by pausing something. Blended figures, total spend against total revenue, are cruder and much harder to argue with, which is why they are often the honest choice.
Creative volume is the lever on paid social and it has a cost
Paid social burns creative fast and the brands that perform are producing enough variations to keep testing. Ask how many new assets a month the fee includes, who produces them, and what happens when the winners fatigue. A media management fee with no production capacity behind it stalls within two months, and the stall is usually blamed on the platform.
Retention is where the margin is and it is usually underfunded
For most direct-to-consumer products the first order does not pay for itself and the second and third do. That makes email, text and the post-purchase experience more valuable per dollar than acquisition, and they are consistently underfunded because acquisition is more visible. Ask any agency what proportion of the proposed budget goes to retention, and treat a very low number as a signal about what they sell rather than about your business.
Questions people ask about DTC agencies
What should a DTC agency cost?
Commonly a percentage of media spend, a flat retainer, or a hybrid, plus creative production which may be separate. The comparison that matters is fee plus media plus discount against contribution margin, not the fee alone, because a cheap fee on an unprofitable acquisition program is not cheap.
Should one agency run paid, email and creative?
It reduces coordination and concentrates risk in one supplier's weakest discipline. The practical test is which channel carries most of your revenue: buy a specialist for that. Whatever you choose, keep the reporting separate so you can see which channel is producing.
How do we know if the agency is actually working?
Blended cost of acquisition against contribution margin, tracked over a period long enough to include repeat purchase, with discount netted off. Platform-reported return on ad spend is the number that can be improved without the business improving, which is why it is the number most often shown.
Is an incrementality test worth doing?
Yes, and it is the only way to know whether a channel is producing sales that would not otherwise have happened. Pausing a channel deliberately for a defined period is uncomfortable and cheap compared with a year of spend on something that was capturing demand you already had.