# On Holding shifts 39% of sales to DTC, targets margin lift in 2026 outlook

*The Swiss running brand is prioritizing owned channels over wholesale to capture more margin per pair sold.*

By **Jenny Huang Goodman MPA MSc MHSA, Principal** — The Stash Edge, Hako Shikin LLC.
Published 2026-10-08.

Canonical: https://www.pops4.com/stash/articles/on-holding-2026-10-08t15-2
Subject: On Holding
Tags: dtc, distribution, margin, channel-mix, wholesale

---

On Holding laid out a 2026 strategy centered on expanding its direct-to-consumer business to improve profitability, according to The Motley Fool. The Swiss performance running brand plans to grow the share of revenue from owned stores and its website while managing wholesale growth more selectively. On's management noted that DTC sales carry significantly higher gross margins than wholesale distribution, and the company expects this channel mix shift to lift overall profitability even as it invests in retail expansion.

The mechanics are straightforward. On operates its own retail stores in key metro markets and sells directly through its e-commerce platform. When a consumer buys a **$170** CloudMonster through On's site instead of a multi-brand retailer, On keeps the full retail margin rather than splitting it with a wholesale partner. The company is opening new branded stores in high-traffic locations and upgrading its digital experience to drive more first-party sales. At the same time, On is being more disciplined about which wholesale accounts it serves, focusing on premium specialty running retailers and a handful of marquee department stores rather than flooding the market.

This works because the unit economics shift dramatically when you control the sale. Wholesale typically requires a **50%** discount off retail to the retailer, who then marks it up. A pair that retails for **$170** might wholesale for **$85**, leaving On with perhaps **$45** after cost of goods. Sell that same pair direct and On captures closer to **$100** in gross profit. The brand also owns the customer data, the post-purchase relationship, and the ability to drive repeat without competing on a cluttered retail floor. On's challenge was having enough brand heat to justify pulling back wholesale distribution without losing visibility. The company solved that by building credibility through elite runner endorsements and a distinctive product silhouette that consumers actively seek out, making the direct channel viable.

A small physical-product brand can run the same play if it has a defendable product and a way to reach its customer without relying on Amazon or multi-brand retailers. Start by auditing your current channel split. If wholesale is above **60%** of revenue and your gross margin is below **50%**, you have room to shift. Build a simple DTC funnel: a clean Shopify site, one targeted Meta ad campaign with a **$500** monthly budget, and a lead magnet like a fit guide or material story that captures emails. Price your product at true retail—do not undercut your wholesale partners—but offer bundles or limited colorways only available direct. Use email to convert and retain. Track customer acquisition cost against lifetime value. If you can acquire a customer for under **$40** and the second purchase happens within six months, you have a repeatable DTC engine. Gradually reduce wholesale to accounts that genuinely move volume or provide strategic placement. The goal is not to eliminate wholesale overnight but to own **30-40%** of sales direct within 18 months, which gives you margin room to reinvest in product and customer experience.

The broader pattern is that brands with strong product-market fit and recognizable identity can afford to be selective about distribution. On is proving that you do not need to be everywhere to grow. You need to be where your customer expects quality and you need to own enough of the sale to fund the next move.

## The takeaway

Shift revenue mix to direct channels where you control margin, customer data, and repeat purchase without wholesale drag.

---

## 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