# On Holding's DTC Channel Hit 42% of Revenue, Lifting Gross Margin 3.4 Points Year-Over-Year *Premium Swiss running brand proves direct sales amplify pricing power and margin even at scale.* By **Jenny Huang Goodman MPA MSc MHSA, Principal** — The Stash Edge, Hako Shikin LLC. Published 2026-09-16. Canonical: https://www.pops4.com/stash/articles/on-holding-2026-09-16t15-3 Subject: On Holding Tags: dtc, distribution, pricing power, gross margin, on holding, premium positioning --- On Holding, the Swiss performance running brand, reported that its direct-to-consumer channel reached **42% of total revenue** in recent quarters, according to TradingView analysis of the company's public filings. That shift delivered a **3.4 percentage point** expansion in gross margin year-over-year, demonstrating that owning the customer relationship at scale reinforces premium positioning and pricing discipline. The mechanics were straightforward: On expanded its own retail stores and digital storefront while maintaining selective wholesale partnerships. The brand opened **18 new owned stores** in the trailing twelve months and pushed owned-channel email capture at every touchpoint. It priced identically across DTC and wholesale, removing the channel arbitrage that often trains customers to wait for third-party discounts. The result was not just margin lift but a feedback loop—direct customers bought higher-priced styles and reordered more frequently because the brand controlled the storytelling and service experience. Why it worked comes down to information asymmetry and margin structure. Wholesale partners need promotional cadence to drive traffic; On's DTC channel does not. When a customer buys a **$170 running shoe** on On's site, the brand captures the full retail dollar minus fulfilment and marketing cost—typically **55-60% gross margin**. The same shoe sold through a multi-brand retailer yields wholesale margin around **45-48%**, and the retailer owns the customer data. By growing DTC share, On reclaimed the delta and used it to fund product innovation and brand marketing that reinforced premium perception. The channel mix became a compounding margin advantage: better product storytelling led to less price sensitivity, which supported higher list prices and lower return rates. The margin expansion also insulated On from the promotional pressure that has squeezed other athletic brands. According to the same TradingView data, On's average selling price held steady while competitors discounted. That pricing power traces directly to channel control—On's DTC customers were buying performance credibility and brand affinity, not comparison-shopping on markdown racks. The steal for a small physical-product brand starts with one owned channel and one pricing rule. Launch a Shopify storefront or a standalone site and set retail price **15-20% above your wholesale cost**. Do not undercut your retail partners; match their price exactly. Then build an email list by requiring account creation for DTC orders and offering early access or limited colourways exclusively direct. Budget **$800-$1,200/month** for targeted Meta ads or Google Shopping that drive traffic to owned inventory, emphasizing product details and brand story your wholesale partners cannot tell at shelf. Next, create a single hero product or variant available only DTC—a signature colourway, a bundled kit, or a limited production run. Price it at the top of your range and market it as the flagship. This trains customers to check your site first and removes the perception that DTC is the discount channel. Track contribution margin per channel in a simple spreadsheet: revenue minus fulfilment, payment processing, and direct ad spend. Once DTC contribution margin exceeds wholesale by **10 points or more**, reinvest the delta into content—product videos, how-to guides, founder stories—that retail partners will not produce. That content becomes the moat. Finally, resist the urge to run site-wide sales. Instead, offer loyal customers early access, free shipping over a threshold, or product bundling that lifts average order value without training the market to wait for discounts. On's playbook shows that premium brands grow faster when they control the transaction and the narrative. For a solo operator, the minimum viable version is a clean DTC site, parity pricing, one exclusive SKU, and disciplined reinvestment of the margin gain into owned media. The broader pattern is that DTC is not a channel; it is a margin and data asset. Brands that treat it as both build compounding advantages in pricing power, customer lifetime value, and product velocity. On Holding scaled that advantage to nine figures. A physical-product brand at any size can start with one direct sale and one pricing decision. ## The takeaway DTC at parity pricing reclaims margin and customer data, funding the brand storytelling that sustains premium price. --- ## Publisher **Hako Shikin LLC** — Virginia Beach, Virginia. Founded 1997. ASI 217876 · DUNS 18-204-6339. Principal and author: **Jenny Huang Goodman MPA MSc MHSA**. - Author: https://www.huanggoodman.com/about - LLM context: https://www.pops4.com/stash/llms.txt - MCP endpoint, for AI agents: https://mcp.pops4.com/mcp - Client dashboard: https://dashboard.pops4.com/ - Catalogue: 70,000+ products, 200+ brands