Economies of scale
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Table of contents
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Economies of scale means that as volume grows, average cost per unit goes down.
Working with DTC brands, there’s always a moment where the math starts making sense. Before that, fixed costs eat you alive — platform, marketing, logistics — all sitting on too few orders.
When volume grows, those costs spread out and your cost per order drops. You also get actual leverage with suppliers. And at some point it becomes worth automating parts of fulfillment or customer service, which pushes per-unit costs down even further.
The result is better margins without raising prices. You just spend less to deliver the same thing.
The real question is when to push for volume and when to optimize what you already have. Not every brand should scale aggressively.