Surviving D2C’s Boom and Bust

Chris Wichert is an investment banker turned direct-to-consumer entrepreneur.

His luxury shoe brand, Koio, launched in 2015 and quickly scaled. Then the pandemic hit. By late 2022, he says, the D2C hype and funding had collapsed.

He slashed costs, stabilized cash flow, and successfully exited the company. In our recent conversation, he shared his story of boom, bust, and survival.

Our entire audio is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Give us the rundown.

Chris Wichert: I co-founded Koio, a luxury footwear brand, in 2015. We exited the brand six months ago, and I helped with the transition. I’m now advising other consumer brands on how to reach profitability and stay there.

I’m from Germany. I started my career in investment banking, then moved to the U.S. for my Wharton MBA, where I met my Koio co-founder.

I live in Brooklyn, New York.

Bandholz: Did Wharton help with the launch?

Wichert: Not directly, but the Wharton School connections were conversation starters for raising money. We moved to New York after graduating.

Our first financing round, about $1.5 million, came 12 months after our launch. The money got us started, but it also set us up for the wrong path. Building a luxury D2C brand with a high average order value requires patience. You have to keep investing to eventually see the compounding effect after five, six, seven years.

We ended up raising close to $20 million over a decade. It was a mix of venture capitalists, family offices like the Winklevosses, and other D2C entrepreneurs.

We used the money initially to fund inventory and build our team. Our first hire was for operations. Our second was for marketing.

We learned quickly that selling a $300 shoe requires a strong brand and credibility. It takes a lot of investment in media outreach, pop-up stores, and retail. Our sales increased when people saw our shoes in person, tried them on, and felt the leather. So we went into retail and digital early on as a dual strategy.

We experienced great growth for the first five years. Our biggest raise, $10 million, came in 2019. But the pandemic wiped out our retail business. We had five stores at the time. Plus, our use case was gone. Our shoes were dress sneakers for dates and nice occasions.

By late 2022, early 2023, the D2C hype and funding had collapsed. Valuations plummeted.

That forced us to make big changes. We were losing roughly $3 million per year with no growth. The company was way too complex and costly. Our SKUs had expanded from men’s dress sneakers into boots, loafers, and slip-ons, for men and women.

We interviewed around 100 customers. We learned that the product expansion was detrimental to the brand. Our messaging was unclear.

We went back to the core items. Then we cut 70% of our New York team, which was painful. We closed the office and transitioned to remote only. We also closed unprofitable dropship accounts and stores. Then we rehired certain remote roles internationally.

Over the ensuing 12-18 months, we reached break-even profitability.

By then, neither my co-founder nor I wanted to keep running the business. We had an obligation to our investors and remaining employees to end the company in the best possible way.

So, I reached out to many people in D2C, especially footwear and apparel brands, to explore an exit or merger. That process was cumbersome.

It took almost two years, but we got a competitive process underway and spoke with several interested parties. We found a trustworthy acquirer who owns several brands and closed the deal with him in August of last year.

The transition lasted just six months. My co-founder and I remain shareholders. We believe in the company and wanted to ensure operational and brand consistency.

We also wanted to integrate our employees into the workflow.

Bandholz: You’ve pivoted to an advisory role.

Wichert: I’ve built a great network of consumer-brand entrepreneurs over the years. I love the industry and want to share my knowledge and experience.

I’m now working with founders across different consumer categories, such as skincare, footwear, eyewear, watches, you name it.

Bandholz: How can people reach out?

Wichert: Learn more about our shoe company at Koio.co. I’m on LinkedIn and X.

EcomFuel Founder on 2026 Industry Trends

For years EcomFuel has surveyed its community of ecommerce merchants about their growth, margins, tactics, and more. The company released this year’s findings last week.

Founder Andrew Youderian recaps the report in this episode, addressing the state of ecommerce among 300 participating businesses.

Our entire audio is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Give us a rundown of what you do.

Andrew Youderian: I run a company and community called eComFuel. My background is in starting and operating ecommerce businesses. We have an online message board, online forum, events, reviews, and research.

Our “2026 Ecommerce Trends Report” is based on responses from 300 store owners — mostly seven, eight, and nine-figure brands — who answered 50 questions.

We ask about traffic, margins, Amazon, warehousing, AI, business models, tariffs, and more. We don’t track the number of merchants who have exited the industry. People join and leave our community every month for various reasons. When asked, some say they’re closing their business. It peaked 12 to 18 months ago. I’m a little more optimistic about ecommerce for the next couple of years.

Going forward, successful brands will likely be smaller with loyal customers. They will make interesting products. They won’t grow as fast, but they’ll be much stickier and more durable in the long term.

The number of respondents in our report who manufacture products increased by 50% over the past three years. All other models were either flat or down. Respondents who resell products are largely unchanged. Private label sellers were down significantly. Drop shipping was down 50%. Merchants are adjusting to a new reality.

In 2017, about 20% of respondents’ total revenue came from Amazon. It subsequently spiked to about 28%. It’s now back to 20%, despite 63% selling on that marketplace.

I respect how Amazon built out its infrastructure for the long term. They’re not going anywhere, but the types of products they sell will likely be either very low-end or very high-end. They’ve lost the middle tier.

Bandholz: Have you tracked AI’s financial impact?

Youderian: For the trends report, we asked, “Have you meaningfully incorporated AI into your business?” Seventy-two percent of respondents said yes. The top four use cases were, in order, copywriting, images, analytics, and coding.

Certainly some merchants have dialed in AI and are seeing strong benefits. But most are still in the investment stage.

For example, EcomFuel has heavily invested in AI over the last year. We’ve built proprietary AI tools. But we’ve not seen great ROI from those efforts. That seems to be what’s happening for most ecommerce companies.

One of the most surprising findings in this year’s survey was the ages of AI adopters. Roughly 90% of respondents under 30 are using AI. But folks in their 30s are investing less than those in the 40- to 54-year-old cohort. Anecdotally, we’re seeing merchants build impressive in-house operational tools, and most are 40 or older.

Bandholz: Where can people join your community or reach out?

Youderian: Our site is eCommerceFuel.com. I’m on LinkedIn and X. I also host “The eComFuel Podcast.”

My Ideal Second Business

Molson Hart is the founder of Viahart, a D2C toy brand, and Edison, a legal technology company. He says every entrepreneur should own two businesses, where one offers more opportunities to scale, is more profitable, or diversifies risk.

I’m all in on Beardbrand, my own D2C brand launched in 2014. Molson is a two-time guest on the podcast. His comment got me thinking about an attractive second company, one that would enhance my life without creating stress and headaches.

So in this episode I’ll depart from my typical guest interviews and, instead, describe my ideal business.

My entire audio narrative is embedded below. The transcript is edited for length and clarity.

My optimal business is an ecommerce brand that sells easy-to-ship products. The items are likely small and, importantly, consumable. Once acquired, a customer would buy two or three times. The products would emphasize both value and prestige, with gross margins that at least cover acquisition ads on Meta.

Lastly, the products appeal to a large enough market to differentiate, niche down, and target the right audience.

So what are those?

Sean Frank is CEO of Ridge, the D2C wallet provider, and a veteran of this podcast. One could argue Ridge’s wallets are consumable: Release new versions, and they become fashion items, enticing repeat buyers.

Yet to me, consumables are what go in or on my body, what I eat or apply every day, such as food, supplements, and personal care goods. For ideas, I would walk into a grocery store, a Walmart, or a Target and just look around. What are folks buying? Which brands are old and stuffy, ripe for disruption?

Examples

Native has moved beyond deodorant, its original product. Moiz Ali, a former guest on this show, launched the deodorant-only brand in 2015 and reached $100 million in annual revenue within a couple of years. Native now sells multiple consumables: skincare, hand soap, toothpaste, and hair products.

Harry’s launched in 2012 as a D2C shaving goods provider, an affordable alternative to dominant players such as Gillette and Schick. The company was wildly successful.

Native and Harry’s focused on staples that consumers use daily.

Seven Sundays launched in 2011 at a Minneapolis farmers’ market. The founders, having realized that most cereal manufacturers used glyphosate-treated wheat and high-fructose corn syrup, offered a cleaner, healthier granola at a higher price point. It’s now a Certified B, ecommerce powerhouse.

Goodles sells a product every parent can appreciate: healthy macaroni and cheese for kids. The brand launched in 2020 with nutritious selections in bright, colorful packaging and fun product names, such as Shella Good and Twist My Parm. It’s another upstart challenging a dominant brand (Kraft) in a big market.

Opportunities

So the opportunities for me lie in creating new products in sizeable markets dominated by stale, out-of-touch providers.

I would differentiate those products in one of three ways.

First is better quality — superior ingredients or components. Parents who prioritize nutrition are unlikely to buy Kraft Mac and Cheese, but they would consider Goodles, even at a higher price. That’s one way to distinguish.

Another way is innovative packaging. Many entrepreneurs overlook this opportunity. Go again to Walmart, Target, and even trade shows. How are products presented and packaged? I’ve seen incredible packaging designs over the years. I once saw packaging for a cosmetic cream where users twisted a bottle cap and pumped the cream into a built-in bowl at the top, to then mix it before applying to their face.

The third way is branding. It’s often easier to launch a brand named after the products it sells or the audience it targets. But doing that can restrict the company later, when the market shifts. Vacation.inc avoids that trap. Founded in 2021, the brand sells sunscreen but can easily pivot to other products and services should the market evolve.

Cool Products

It rarely makes sense to exactly replicate what another entrepreneur has started. Don’t listen to a successful owner on a podcast like this and think, “That guest is killing it. I’m going to do the exact same thing.”

Often the owner has not proven the business over the long term, and regardless, copying her merely carves up that audience. Instead, learn from successful brands such as Vacation, Inc., and apply their tactics to an entirely different market.

Have some fun. Make your own cool products.

How Vessi Sells Waterproof Shoes

Ray Hua is the director of ecommerce at Vessi, a Canada-based direct-to-consumer seller of waterproof sneakers. The brand launched in 2017 after its founders developed and patented breathable fabric that repels water. Ray joined the company in 2021.

In our recent conversation, he shared the challenges of targeting the right audience, cross-border selling, diversifying, and more.

Our entire audio is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Give us a quick rundown of who you are and what you do.

Ray Hua: I’m the director of ecommerce at Vessi, a direct-to-consumer waterproof sneaker brand. I oversee strategies for site experiences, performance, merchandising, and lifecycle marketing. It’s been with the company for about five years.

Vessie launched nine years ago. Our founders developed and patented a lightweight, waterproof, and breathable fabric called Dyma-tex. People assume waterproof means it is not breathable. But our product is comfortable and looks like a regular sneaker.

During the pandemic, we gifted our product to healthcare workers. We received a lot of positive feedback from other communities, so we collaborated with niche networks to offer our products at a discount.

We’ve hired a lot of paid influencers in categories where folks are on their feet all day. We have tiers of influencers. Some have dedicated landing pages; others are for getting our name out.

We invest heavily in Meta for customer acquisition. We’re looking to diversify into Google and TikTok Shop. We’ve advertised on TikTok and even Reddit. Both drove a lot of traffic, but the quality was not very high. We couldn’t easily attribute revenue coming from those channels.

Bandholz: Vessi now sells apparel.

Hua: It’s more of an experiment in response to feedback in our customer surveys. Many mentioned expanding into apparel, socks, and accessories. They like our technology and want items that are fashionable and functional.

So we’re testing those categories for additional revenue. It hasn’t been smooth. We developed apparel that performed poorly and diverted resources from our footwear line.

Still, it was a good experiment and demonstrated the steep learning curve for a category we are not familiar with.

Bandholz: Vessi has warehouses in Canada and the U.S. Do you market differently to consumers in those countries?

Hua: Yes, we use different ads for each market. People in Canada know our brand. Our messaging to them is typically announcements about dropping new colors or limited editions.

We’re not as prominent in the U.S. Our ads there introduce the brand and explain the product’s benefits. Seattle is probably our best region in the U.S. It’s close to Vancouver and gets a lot of rain. We’re also strong in Florida, however, which is both sunny and rainy.

Bandholz: Does AI influence your marketing efforts?

Hua: We’re using AI tools mostly for operations. For example, we use AI to identify influencers aligned with our interests.

We’ve dabbled in AI to produce ad copy. We haven’t gone into AI-generated images or videos, mainly because we have strict brand guidelines.

Bandholz: Where can people find you, support you, buy your products?

Hua: Check out our products at Vessi.com. I’m on LinkedIn.

From Teacher to Fashion Brand Founder

In 2019 Nasrin Jafari was a middle school teacher in New York City. She had no ecommerce experience but was drawn to creating and building, which led her to sew and sell face masks during Covid.

Fast forward to 2026, and Mixed, her direct-to-consumer fashion brand, designs and produces female apparel and accessories. Referring to the company’s launch, she told me, “I had no idea how to make clothes.”

She does now, impressively, with multiple manufacturers, a thriving community, staff, and eager customers. She shared her story in our recent conversation.

Our entire audio is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: What do you do?

Nasrin Jafari: I’m the founder and designer of Mixed, a fashion brand based in Brooklyn. Before Mixed, I was a middle school history and English teacher with no background in ecommerce. During the pandemic, I began sewing face masks by hand and posting them on Instagram. That was the first physical product I had sold. That experiment evolved into a full apparel brand.

It all began with Instagram posts, not Etsy or marketplaces. I didn’t understand Meta ads or ecommerce marketing. I’ve learned those pieces as the business grew.

Creativity has always been part of my life. I painted and took art electives growing up, and I was a competitive dancer in high school. Yet I’ve always been drawn to business and building things. In college, those interests merged into a desire to build something meaningful. I thought that might be as a school teacher.

In many ways, building a brand is similar to teaching. You’re creating a vision, culture, and community around shared values. Mixed reflects my identity — I’m Japanese, Iranian, and American. The brand name captures that blend of influences and the balance between creativity and operating a business.

Bandholz: Fashion seems highly competitive.

Jafari: I started the business out of curiosity. I had no idea what I was getting into. Would I choose to go into apparel again? Probably not, although there’s a side of it I love.

I learned by doing. Inventory is really tricky. I was afraid of overordering inventory and ending up with dead stock. That’s why we launched a pre-order model. We now do a lot of pre-orders, which helps our cash flow, but I didn’t start it for that reason. It was because I was out of stock. Then I realized that the model is great for business.

Another thing is returns, which are a big part of online apparel. We have to acquire customers in a way that accounts for returns. I didn’t understand that initially. Again, it comes down to learning by doing.

Bandholz: You design your apparel. Where is it manufactured?

Jafari: I was looking for factories during Covid. Many of them had excess capacity. I found a factory in India whose owner was based here in New York. So that was an in-person element to build trust and a relationship. He was willing to work with us with no minimum order quantities.

His cost was higher than, say, Los Angeles-based manufacturers, but we still maintained a 75% margin. Our average order is about $228.

We’ve since scaled and can order larger quantities. We’ve added factories with lower costs.

I found the India factory by googling. After that, it was recommendations from friends in the industry, which I prefer. They worked with them, vetted them, and liked them.

Bandholz: What is your production and design process?

Jafari: I had no idea how to make clothes. I literally went to JoAnn Fabrics and tried to follow the pattern. I realized quickly I wasn’t good at it, and it was going to take time. I had connected with a home sewer on Instagram. She seemed to love our brand but had not worked in a commercial capacity. I asked her to make our initial samples. She was thrilled. She made the initial samples, one of which remains our best-selling product.

Now I’m at a point where the factory does a lot of that. I send sketches with very minimal specs, and they can figure it out.

Selling true bespoke garments requires a dedicated designer, either in-house or outsourced. But factories with extensive garment experience can usually handle simpler items.

I design on an iPad with a stylus using Procreate.

Bandholz: I’ve seen your new-arrival ads on Instagram and Facebook. You seem to have a blueprint that is working.

Jafari: Yes, all our advertising has been on Meta. No Google or TikTok.

We have a couple of ad formats. It’s like a flywheel, as we continue to scale. We find the models, then shoot the videos in-house. Then we edit in the Philippines, and create and upload new ads to Meta.

My first successful ad came from an outing with a girlfriend. I was wearing one of my jumpsuits. I asked her to shoot me with a couple of angles, nothing fancy. It showed my outfit in an urban setting. The ad worked. We repeated the concept.

Bandholz: Are you handling your own fulfillment?

Jafari: Yes. Part of the initial rationale was returns, and part was our low volume. Plus, our pre-order model meant we were receiving inventory constantly. Getting it to an outsourced fulfillment provider added an extra step and delayed delivery to our customer.

Bandholz: How do you ensure your products resonate with would-be customers?

Jafari: When we design a piece, I’m always thinking about the customer — who she is, what she wants, and what we’ve already given her. The goal is to create what she needs next. My personal taste influences the brand, but I try not to be overly subjective about design decisions. Ultimately, customer response and sales tell us what works.

We also gather feedback from our community. We host discussions in our Circle community platform where customers comment on fabric designs, share preferences, and discuss products. That feedback, along with replies to my weekly newsletter and in-person events, provides valuable qualitative insight.

Our target customer is a 35- to 65-year-old woman who values creativity, independence, and self-expression— and wants clothing to reflect that.

Bandholz: Where can people buy your clothes, support you, follow you?

Jafari: Our site is MixedByNasrin.com. I’m on LinkedIn.