# On Holding grew DTC to 39% of revenue, protecting 52% gross margin while peers discount *Swiss running brand owns the customer relationship to hold premium pricing when wholesale partners compress.* By **Jenny Huang Goodman MPA MSc MHSA, Principal** — The Stash Edge, Hako Shikin LLC. Published 2026-09-14. Canonical: https://www.pops4.com/stash/articles/on-holding-2026-09-14t03-4 Subject: On Holding Tags: dtc, distribution, margin defense, athletic footwear, premium positioning, retail strategy --- On Holding expanded its direct-to-consumer channel to **39% of total revenue** in recent quarters, a calculated shift that preserved its **52% gross margin** even as wholesale athletic footwear faced widespread promotional pressure, according to TradingView analysis. The Swiss running brand — known for CloudTec cushioning and a premium position above Nike and Adidas — used DTC growth to insulate pricing from the margin squeeze hitting wholesale partners. The company opened **20 new retail stores** in the past year and grew its e-commerce operation without sacrificing its relationship with specialty run shops and premium department stores. On kept wholesale revenue flat in absolute dollars while DTC climbed, meaning the brand extracted more profit per pair sold. The mechanism: when you own the transaction, you control the price and capture the full retail margin instead of splitting it with a distributor who may later discount to clear inventory. This worked because On entered DTC after establishing brand credibility through specialty retailers. Customers already knew the product and associated it with performance, so the brand could open stores and drive online orders without heavy acquisition spend. The wholesale base created awareness; the DTC layer monetized it at higher margin. On also bundled subscription services and exclusive colourways through owned channels, adding retention levers unavailable to wholesale partners. The margin defense matters now because athletic footwear wholesale has turned promotional. Department stores and sporting goods chains are sitting on inventory and marking down last season's models to move units. Brands that depend on those channels see their premium positioning erode when a retailer discounts without permission. On sidesteps that trap: **39% of its revenue** flows through channels it controls, where the price holds and the customer data stays in-house. A small physical-product brand runs the same play in stages. First, prove the product through a handful of wholesale accounts that lend credibility — specialty shops, curated boutiques, or respected online marketplaces. Do not chase volume; chase signal. Once those accounts reorder and customers ask where else to buy, launch a Shopify store with the same product at the same price. No undercutting your retail partners. Offer one exclusive colourway or bundle available only direct, so the owned channel has a reason to exist beyond convenience. Next, install email capture at checkout and build a monthly newsletter that teaches rather than pitches. Share the origin story, the material choice, the founder's reasoning. This owned audience becomes the base for future launches and lets you test pricing or product variations without a retailer's approval. If the brand grows to multiple six figures in revenue, consider a single flagship retail space in a market where your customer density is high. That store becomes the content hub and the credibility anchor, just as On's retail locations reinforce its premium story. The cost line for a sub-**$1M** brand: Shopify Plus at **$2,000/month**, Klaviyo for email at **$500/month**, and modest paid social to drive owned-channel traffic at **$3,000/month**. A single retail lease in a secondary market runs **$4,000–8,000/month** depending on location. The math works when DTC gross margin exceeds wholesale by **20+ points**, and you invest the difference in retention rather than acquisition. On Holding's DTC expansion is not a rejection of wholesale — the brand still sells through premium partners — but a hedge against the margin risk of relying on distributors who face their own inventory and promotional pressures. For any physical-product brand with a price above commodity, owning a meaningful share of the customer relationship is the path to pricing power when the market compresses. ## The takeaway Grow DTC to 35–40% of revenue so you control pricing when wholesale partners discount under inventory pressure. --- ## 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