| Metric | Benchmark | Notes |
|---|---|---|
| At $1M revenue | Gross margin 65-75%, contribution margin 47-63%, EBITDA -5% to 8% | Contribution margin here is before marketing, which typically runs 25-35% of revenue. At $1M you might not be profitable, and that's okay if the unit economics are sound. |
| At $10M revenue | Gross margin 70-80%, contribution margin 55-70%, EBITDA 10-18% | Profitability becomes non-negotiable: target 10%+ EBITDA. Marketing typically runs 20-28% of revenue. |
| At $50M revenue | Gross margin 75-82%, contribution margin 63-74%, EBITDA 15-25% | Target 15-20%+ EBITDA margins. Marketing typically runs 15-22% of revenue. |
| At $100M+ revenue | Gross margin 78-85%, contribution margin 68-78%, EBITDA 20-30% | Marketing typically runs 12-18% of revenue. At every stage, the EBITDA range directly sets your valuation multiple. |
| Gross margin by category | Beauty 65-82%, supplements 60-78%, apparel 50-65%, pet 45-65%, home 40-60%, food and beverage 35-55%, electronics 30-55% | Premium DTC ranges; mass-market and commodity products run 10-20 points lower. Below 50%, growth becomes very hard to fund. |
| Contribution margin targets | 50%+ before marketing; 30%+ after marketing on first orders | Contribution margin before marketing funds acquisition and overhead, and it's the number LTV uses. Repeat orders should run 50-70%, because they carry no acquisition cost. |
| Landed cost vs factory price | 1.4-1.8x factory gate (40-80% above FOB for China-sourced goods) | Freight, duties, tariffs and customs handling sit on top of the factory price. Model every margin on landed cost, never the factory quote. |
| Fulfilment and variable costs | 12-18% at $1M, falling to 7-10% at $100M+ | Pick, pack, shipping, payment fees and returns. Scale brings it down, but returns quietly push it back up: DTC returns average about 14%. |
How to use these benchmarks
These ranges are directional, not guarantees. They are drawn from The DTC Playbook and Rob Ward's operating experience taking Quad Lock from $0 to a $500M exit, cross-checked against widely cited DTC data. The point is not the exact number - it is whether you sit above or below it, and what to do about the gap. Judge yourself against your own category and trend as well.
Last reviewed: October 2026. Benchmarks are refreshed as the playbook is updated.
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