Back in my early days in the ecommerce industry, Dollar Shave Club was the case study everyone talked about. The mid-2010s were peak DTC optimism, and DSC was a company I remember was referenced in many books and articles written at the time. It felt like the dream entrepreneur story, with a $5000 video that went viral, and a subscription model that looked very promising. The company was said to have “won” against Gillette and “disrupted” the industry, being the example of how DTC was a powerhouse and the subscription model was the golden goose of online retail.
Earlier this week I was reflecting on how much the ecommerce world has changed over the past decade, and DSC came to mind. Where are they today? Why do we never hear about them anymore? So I thought it would be interesting to reflect on the mistakes that were made along the way. Two years ago I wrote about Unilever selling Dollar Shave Club. At the time I focused on the news itself. Looking back, I realize the more interesting story is what the channel strategy decisions behind it teach us.
1 – Why DTC Worked Initially
Dollar Shave Club launched in January 2012 with a video that Michael Dubin shot in a single day for around $5,000. In 72 hours, the video went viral and generated 12000 new subscribers. I found the video impressive, although I don’t think it would work today. But what I find even more interesting is the product the company sells.
Razor blades are a near-perfect subscription product: consumable, predictable usage, high repurchase frequency, and at the time, absurdly overpriced at retail. Gillette was not loved by customers, but they had to buy blades and did not care too much. DSC gave them a reason to switch with their product delivered to their door, at a reasonable price, and made them feel smart for doing it.
What I find equally interesting here is the choice to go DTC. It made sense economically, DSC sourced blades from Korean manufacturer Dorco, fulfilled through 3P logistics, and built a subscriber base where lifetime value significantly exceeded customer acquisition cost (27 millions views with a $5000 video isn’t a bad ratio). At the time, advertising on Meta and Google was still affordable, especially in this niche, which allowed them to compete with Gillette. The industry was not as competitive as it is today, but I’ll go back to that in a moment.
By 2016, DSC hit $225 million in sales and Unilever acquired the company for a reported $1 billion.
2 – Why DTC Was Not Sustainable
The problem with building a DTC brand around a commodity like razor blades is that the differentiation has to come from somewhere other than the product (DSC do not manufacture their blades, and there is no differentiator about them). There were three options, each exploited by the brand, with the subscription convenience, the price, and the strong brand personality. Unfortunately, these were short term advantages.
The barriers to entry in this niche were low. I don’t know if DSC had an exclusivity clause with Dorco, but I doubt potential competitors had trouble finding a way to source blades. Within a few years, Amazon was full of cheap razor alternatives from brands nobody had heard of, many at prices DSC could not match. DSC went DTC to cut the middleman, but they were themselves a middleman between Dorco and the supplier.
I realized that competition came from every side. Amazon built a subscription option directly into its platform, Gillette launched its own DTC subscription and cut prices, and Harry’s attacked on product quality.
Another strategy DSC used was cross-selling into grooming products, which also failed too. This one was in my opinion visible before it even launched. DSC’s value proposition was no-nonsense product sold at a lower price than alternatives. Consumers were probably confused why they launched their grooming products at a more premium range (and this did not work as well in terms of subscription).
Talking about subscriptions, the brand quickly hit a ceiling. The best estimates are that DSC peaked at around 4 million subscribers, and approximately 3 million at the time of the Nexus Capital acquisition in 2023. I assume that scaling further involved unsustainable economics, especially with CAC that kept increasing in the industry over the years.
3 – The Choice of Ignoring Amazon for Too Long
For most of its early life, Dollar Shave Club was not sold on Amazon, which makes sense given their identity and strategy to cut out the middleman and build a relationship with the customers. They also wanted to own the customer experience from start to finish. Selling on Amazon would have compromised their identity and philosophy, the same way I can’t imagine Hermes purses to be sold at Macys.
The other aspect is economics, and my guess is that the thinking went something like this: “our customers are loyal subscribers, they buy from us directly, and anyone buying razors on Amazon will eventually find their way to us. Why share the margin with Amazon when we already have a direct relationship?”
The problem is that while DSC was protecting its DTC margins and subscriber base, Amazon was filling up with cheap razor alternatives from brands nobody had heard of, at prices DSC could not easily match, and delivered the next day with Prime. Some consumers may have tried to find DSC on Amazon, but ended up finding a 4.5 stars Chinese product for nine dollars, and never looked back.
DSC missed the window to establish the optimal presence on Amazon. By the time they eventually joined, they arrived late to a crowded shelf with no early-mover advantage, competing against the same pricing strategy they had originally used to disrupt Gillette. Amazon now represents roughly 15% of their digital sales, but I think this number could have been much higher if they had joined Amazon earlier. I believe they still pay the price of this decision today.
Of course, I am not telling you that every DTC brand should be on Amazon, but “we do not want to be there” should be justified.
4 – The Unilever Acquisition and the Loss of Another Asset
Unilever paid $1 billion for Dollar Shave Club in 2016. I am guessing they were interested in buying their first DTC company to get the expertise and see if the model could expand to other categories. The problems were visible internally well before the sale. In 2022, the CEO at the time Alan Jope said during an earnings call “Dollar Shave Club did not deliver as expected, and the economics of the DTC model changed.” If the model was changing, why did the channel strategy not change with it?
For DSC, the acquisition diluted their strong brand image, and forced them to look more bland compared to their successful early days. Dollar Shave Club CEO Larry Bodner himself said this neutered the voice of the brand. The marketing became overly polished and the humor more corporate. It did not feel like a real person with a strong personality was talking to you, and corporate-safe messages did not feel the same way.
By losing its brand voice, DSC became even more commoditized, and competed purely on price and convenience (which as of 2023 was not enough in this industry). In October 2023, Unilever sold a majority stake to private equity firm Nexus Capital Management for an undisclosed sum, certainly a lot less the billion they paid seven years earlier.
Conclusion
I find DSC early days impressive, and I think they made a lot of right decisions. Let’s be real, selling a company for a billion dollars to Unilever is no joke.
The problem in my opinion was that the channel strategy never evolved, and the brand struggled to build or maintain a moat. Barriers to entry were low, competitors arrived, and the model that initially worked could not evolve to be successful in the new environment. As of today, the brand moved away from pure DTC, with Walmart and Target being their second-largest distribution channel after DTC, and Amazon being 15% of their revenues.
What happened is a combination of issues many brands faced in the past decade, with strong competition (especially from overseas manufacturers), marketplaces being hard to beat on convenience, and brands losing their identity as they grow.
Now DSC is currently trying to return to its original voice, with new marketing campaigns, but we’ll have to see if that works in a category that has changed so much over the past decade.
Sources: Unilever press release October 2023, Inc. Magazine, Forbes November 2025, Adweek January 2025, Business Insider.
See my previous post about DSC : https://fmaingret.com/2023/11/from-disruption-to-divestment-unilever-is-selling-dollar-shave-club/