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Comment by ghaff | Hacker News Reader

Good article. The gist of the piece is that a lot of these direct-to-consumer businesses are trying to "disrupt" markets that the vast majority of people don't see as broken.

There do seem to be some different categories of products here. One is essentially trying to create new luxury brands for, e.g. toothbrushes, that either don't exist or are pretty old-line and non-millennial.

Others are trying to take business from entrenched dominant companies as in eye wear--which is what Warby-Parker did. However, as the article notes, it's not clear how many of those there are. Are high-end towels, etc. really an example of a market failure today? Probably not.

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> The gist of the piece is that a lot of these direct-to-consumer businesses are trying to "disrupt" markets that the vast majority of people don't see as broken.

You can do interesting things with products when you remove some of the vast middle-men distributors that sit between you and the customer and reclaim margin. Whether producing a higher quality product at a lower or similar price, or producing an equal quality product at a far lower price.

Plus, the big product conglomerates and retailers have an effective monopoly on traditional product access (Colgate, Kraft, Procter & Gamble, Walmart, Target, Costco, Walgreens, et al). The margin saved by removing some of the middle-men, can then be used for distribution-marketing-sales to reach out to customers in order to breach that comfortable group monopoly.

Maybe.

>A Bristle subscription would be more convenient than going to CVS when you need a new toothbrush--you'd order online, set your replacement-head frequency, and forget about it.

Picking up a toothbrush every now and then--assuming you don't just get given them at every cleaning by your dentist--is so far down the list of problems that I and most people have as to be negligible. Furthermore, I doubt if middlemen markups on toothbrushes are a big problem when in fact overheads are probably far lower overall.

There are clearly some things like eyeglasses that the existing market is fairly broken. But most goods simply aren't in that situation.

As someone with a toothbrush subscription: I now change my toothbrush every 3 months. Left to my own devices it was closer to every year.

I am assured by everyone that this is better. I don't really feel like it's something worth thinking about so I am happy it's being taken care of by not-me.

A wholesale pack from Costco and a repeating calendar event on your phone accomplish the same thing, and I don’t see how shipping an individual toothbrush can be cheaper than that. And I would think many people already have spare toothbrushes lying around in case family or friends visit and don’t have theirs.

That's my feeling anyway. Managing a bunch of subscriptions sure seems like a lot more mental effort than adding things to shopping lists when they're running low or doing as you say. (Unless it's really something you use substantial and predictable quantities of.)

I’d assume most people at least change it when they get a free one at their six month cleaning.

Looks like you're also assuming most people can afford cleanings twice a year...

A dentist cleaning without dental insurance is $100 or less in the US. Yes, I realize there are people for whom that is a non-trivial expense. The overlap between that demographic and those getting some startup toothbrush service is, I would assume, nil.

If you're a consumer of niche subscriptions, I don't think a dentist appointment every 6 months is going to be a financial burden.

Yes. Also. Glasses are a fashion / style item. There are ppl who want something different / obscure. That feeds traction. That feeds "Nice glasses. Where'd ya get them?"

On the other hand, who has conversations about toothbrushes and such?

Dollar Shave Club succeeded in a similarly “boring” category.

Well they were able to subvert the "Gillette" pricing strategy (give away the shaver and sell the blades). There was a lot of margin in the prevailing blade prices that they could undercut and still make money.

Offtopic, for me the best value in shaving is to buy an old-fashioned "safety razor" with the replaceable double-sided blades. The blades are dirt cheap and in my experience are sharper than what you get in other multi-blade shavers.

> There was a lot of margin in the prevailing blade prices that they could undercut and still make money.

I also suspect they do not have fat margins on the razors, but the ancillary purchases you can throw in with your monthly razor delivery: shaving cream, aftershave, etc.

They succeeded because they were cheap. Those toothbrushes are pretty expensive (compared to $1/each brand name toothbrushes on sale)

> The margin saved by removing some of the middle-men, can then be used for distribution-marketing-sales to reach out to customers in order to breach that comfortable group monopoly.

Kinda. If there is no natural market per se (i.e., you have to use marketing dollars to convince consumers they not only want Product X but __need__ it) then you're going to need __a lot__ of money. Coke / Pepsi money. Verizon / Comcast money.

Sure. WP is a wonderful story. Everyone loves it. It feels good. Or maybe it was just luck / timing? Maybe the traditional players then were slow and blind? Is that still the case today? Or are those opportunities dwindling? Quickly?

I suspect the latter.

In the WP case there was essentially a monopoly (Luxotica). As a monopoly they had built in additional profit and limitations that gave WP more room to work. It was definitely a broken market. Traditional competitors like Oakley were killed by Luxotica stores simply refusing to carry their brands and then buying the company when the stock sank. The "disruptive" delivery was needed to be a viable competitor.

It's not that the margin saved by going direct can be used for marketing. It is that that margin must be used for marketing, sales, etc. because they have no partner doing it for them. The retailer would in normal cases handle that. DTC isn't necessarily better or worse, just different.

> You can do interesting things with products when you remove some of the vast middle-men distributors that sit between you and the customer and reclaim margin.

This is why I'm starting to love Alibaba. I used to buy composite hockey sticks at the local retailer. Over the years, the tech has gotten better, but the pricing and the gimmicks have increased to where now a stick is in the $200-$250 range.

I started contacting carbon fibre manufacturers on Alibaba from China last year. I did my due diligence and found a manufacturer who sold me comparable sticks for around $100. I pick the length, the flex, the blade pattern and they're 400g, the same weight as my high end retail sticks. I wasn't expecting much tbh, but they've held up really well and have had a consistent feel over the past year and have taken quite a bit of abuse without breaking. By comparison, I went through three retail sticks over the same time last year.

Even with the $50-$60 in shipping they charged me, two sticks cost me $196. It made me think about all the markup I just cut out of the equation by working with the manufacturers directly.

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