If you run a DTC brand in 2026, you've probably felt it.
Your product is strong. Your customers love you. Your team is working hard. And still, the business can feel... fragile. One late container, one ad account wobble, one payout delay, and your plan for the month changes overnight.
That fragility isn't a character flaw. It's structural.
Today, at Paperstack, we've seen thousands of eCommerce brands. And the most overlooked lever I keep coming back to is simple: you need a B2B channel.
Not "one day." Not "after retail." Now.
Because B2B is hidden revenue. And it also changes your cash flow quality - predictability, timing, and sustainability. That's what keeps you in control when the market gets noisy.
DTC growth is real. DTC-only growth is exhausting.
Here's what I mean.
In DTC, you get paid fast, but you also spend fast. Inventory deposits hit before revenue. Marketing has to stay on. Shipping costs don't care if your ROAS is having a bad week.
And for most product brands, the cash conversion cycle is longer than founders want to admit. Deloitte research on consumer businesses points to 50+ day cash conversion cycles as a common reality. That gap between when you pay and when you collect is where "healthy" brands get squeezed.
There's also a brutal stat that should keep every operator humble: roughly 82% of small business failures get tied back to cash flow problems. Not lack of demand. Not lack of ideas. Cash timing.
That's why I talk about timing so much. Growth isn't just about how much you sell, it's about when you sell it.
The banking lesson I still think about
When I was in banking, I kept seeing strong consumer brands get declined for reasons that had nothing to do with whether the business worked.
One example I've shared before was a DTC beverage brand doing over $3M in annual revenue. Customers were loyal, margins were healthy, cash flow was steady. The bank still saw red flags: no hard assets because they outsourced manufacturing, seasonal swings because summer demand was higher, and marketing spend that looked like an "expense" instead of an investment engine.
The risk model was built for equipment and collateral. The brand was built for modern commerce.
That gap is why I push founders to build stability inside the business. You can't wait for old models to catch up. You have to design your revenue mix so your business can breathe.
Selling out is expensive (even when it looks like a win)
I'm direct about this because founders get hurt here.
Selling out feels like validation. It's also often a cash flow and planning failure. When you stock out, you don't just lose today's sales. You lose momentum with the buyers you already paid to earn.
Harvard Business Review has shown stockouts can push away 10 - 20% of potential customers and drive up future acquisition costs. You pay again to rebuild trust with people who were already ready to buy.
I've seen a brand go viral during the holidays and run out of stock. It didn't feel like a victory. It broke consumer trust at the exact moment they needed reliability.
So when founders tell me, "We're selling out every launch," my first question is: are you building a brand, or are you burning future demand to survive this month?
Zoom out: you're fighting for a slice of the market
A lot of DTC founders act like online consumer sales are "the market."
They're not.
U.S. eCommerce is still only about 15 - 20% of total retail. That means most buying still happens offline, through institutions, through offices, through wholesalers, through corporate budgets. Even when the order is placed online, the buyer might be a business.
And at the category level, business purchasing is massive. Forbes has written that the global B2B eCommerce market is roughly 3 - 4× larger than B2C. That's the "hidden revenue" most DTC teams don't chase because they assume it's complicated.
It's not complicated. It's different. And different is good, because it reduces your dependency on one channel, one platform, one algorithm.
What B2B does to your P&L (my "structural engineering" view)
I treat finance like structural engineering. I'm looking for load-bearing pillars.
When a DTC brand adds B2B, the structure gets stronger in a few practical ways.
Bigger baskets show up fast
In DTC, you sell one unit at a time. In B2B, you sell in larger quantities. That changes forecasting immediately.
You get fewer transactions, bigger orders, and a clearer view of demand. Your ops team can plan production with more confidence. Your finance team can plan cash with fewer surprises.
And it's not only about revenue. It's about how revenue behaves.
Shopify research has shown wholesale and B2B channels reduce volatility, and brands with a balanced mix can see inventory turn 20 - 30% faster on average. Faster turns mean less cash trapped in boxes. That's oxygen.
Better terms can improve cash flow quality
A lot of founders assume B2B always means Net 90 and pain.
In practice, many B2B invoices land on Net 30 or Net 60, and you can often structure deposits when the order has customization. You don't need to accept terms that put you underwater.
This is where I always say: terms are the keys.
When terms improve, your cash cycle improves. And when your cash cycle improves, your marketing decisions improve. You stop making reactive cuts that hurt growth.
McKinsey has a point I love because it matches what I see every week: freeing up working capital can drive 4× the profit impact compared to chasing the same profit through revenue growth. Founders love new revenue. Operators win by improving timing.
Higher LTV and calmer forecasting
If your product is good, business buyers reorder. It's normal.
Gartner research on B2B buying behavior suggests a big share of B2B customers place recurring orders on 30 - 90 day cycles. Once you become "the vendor," your LTV becomes real. You're not reinventing demand every week.
That's the stability most DTC teams are craving, even if they don't say it out loud.
Corporate gifting: the easiest wedge I've seen
If you want one B2B entry point that works across categories, start here: corporate gifting.
Companies need gifts for clients, employees, partners, holidays, onboarding. There are budgets for this. Real budgets.
Fortune Business Insights estimates the corporate gifting market was $62 - 75B and still growing. That's not a niche. That's a lane.
I've seen a brand position their product as a gifting opportunity for large institutions like banks and law firms. Those businesses bought hundreds at once and gave them to their own customers.
The brand got bulk revenue, yes. But they also got distribution.
The gift recipients discovered the brand through the institution. Some searched the company, subscribed, and bought later through DTC. The corporate order turned into "free advertising," because the brand reached hundreds and thousands of consumers with spending zero dollars on ads.
That's a big deal when you're spending a meaningful portion of revenue on marketing. In my experience, growing brands often put 15% to 25% of annual revenue into marketing. That's one of the top three expense lines, right next to inventory and shipping.
If corporate gifting reduces the pressure to spend every week just to stay alive, that's not a nice-to-have. That's margin protection.
"Terms are the keys": protect cash flow even with Net 60
Let's talk about the part founders fear: getting the PO, then waiting forever to get paid.
This is where personalization becomes a working capital strategy.
When you add a corporate logo, a custom sleeve, a personalized note, or anything that makes the order specific to that company, you have leverage. The buyer understands that customized inventory can't be resold if they cancel. That's why they'll often agree to an upfront deposit as a security deposit.
You're not being aggressive. You're being realistic.
Even a partial deposit changes the cash gap. It helps you pay the supplier deposit without draining your DTC cash. It also forces clearer communication on timing, approvals, and delivery dates.
And one more thing: be honest about lead times. If you promise a rush timeline to win the deal, you can end up starving your DTC channel and creating a stockout. That cost shows up later as higher CAC and lower repeat purchase.
Borrow the SaaS playbook (this works)
When founders hear "B2B," they assume they need a whole new machine.
You don't.
Reach out to your friends who sell software to businesses and ask how they do it. Then borrow the parts that translate.
Land and expand inside institutions
One SaaS move I love is land and expand.
I've seen founders close one branch of a multi-office institution, then ask for an intro to other offices in other cities. If you get the New York office, you ask for Boston. You ask for London. You keep going.
Harvard Business Review case studies on account expansion show vendors can see up to a 3× increase in transactions when they expand across locations inside the same organization. That lines up with what I've seen in commerce too.
It also builds credibility fast. Smaller brands struggle with trust. Corporate logos on your customer list change the conversation.
The 50-business validation sprint
Founders love planning. Operators love proof.
If you want proof, do this: start small and validate with real conversations. I wouldn't pretend you have everything figured out. I'd start with your immediate network, then go local.
Call or email 20, 30, 50 businesses. Try a dental office, a local gym, a clinic, a bank branch, a coworking space. You're looking for patterns. Who responds? Who buys? Who asks for customization? Who cares about pricing versus delivery?
Once you get a few early wins, overdeliver. Then pick the niche that liked you most.
If three law firms responded, stop being general. Go deep. Contact 300 law firms. Do the same with dental offices if they're your best buyer. That's how you scale without guessing.
This is exactly how my brain works. Linear. Diagnostic. Test, learn, narrow, then 10x.
Keep B2B from breaking your DTC machine
Adding a new channel can create chaos if you treat it like "extra credit."
The most common cash crunch I see in eCommerce isn't low sales. It's timing misalignment between revenue, marketing, and inventory. Teams run these as separate functions, then act surprised when the cycles collide.
B2B forces you to get disciplined.
You need a marketing calendar that reflects inventory reality. You need inventory planning that respects your biggest orders. You need cash planning that accounts for deposits, production schedules, and platform payout lags.
This is also where my leadership philosophy comes in. Unapologetic optimism isn't about blind positivity - it's about discipline.
I've lived this with brand partners during volatility. One partner got hit by new import tariffs that increased landed costs overnight. Many leaders in that position freeze inventory orders and cut marketing to preserve cash. We ran scenarios instead. Tariffs held, dropped, expanded. We built options and aligned a flexible capital plan.
That kind of planning keeps you stocked while competitors hesitate. And when the market stabilizes, the stocked brands capture share.
Funding B2B growth without losing control
B2B can make your revenue more stable. It can also make your working capital needs bigger, because bulk orders need bulk inventory.
This is where founders make financing mistakes.
My rule is simple: equity is best used for R&D and new product launches. Non-dilutive capital is better for recurring expenses like inventory and payroll. Inventory is repeatable. Dilution is forever.
And I'm also a big believer in disciplined draws. Just because your business qualifies for a large amount doesn't mean you should take it all at once. That creates pressure on daily cash flow, and you end up paying for capital that sits unused.
At Paperstack, we built our Capital Wallet around this reality. We're a direct lender, not a broker. We give larger commitments, then brands draw in tranches as they need it. Many draw every 45 - 60 days, aligning the draw with supplier payment schedules. That's how capital starts working with your business, not against it.
Industry benchmarks back this up. CBInsights has pointed to revolving structures cutting financing costs by 20 - 40% in predictable cycles, simply because you stop paying for money you don't need still.
What to ask any non-dilutive capital provider
If you're evaluating non-dilutive offers, don't get hypnotized by the headline rate.
Ask what the total cost of capital is once you include fees. Ask whether they underwrite your full business across Shopify, Amazon, and wholesale, or only one channel. Ask how remittance behaves in slow months and in huge months, because structure matters more than people think. Ask how they treat wholesale revenue - do they count it when the order is created, or when cash actually hits your bank? Ask where the money goes, too. Some providers pay suppliers directly, which can limit your flexibility.
And ask what support looks like after funding. Will you get passed around, or will you have one partner who learns your operating rhythm?
You're looking for alignment, not just access.
The metrics that tell you B2B is working
B2B success isn't vibes. You'll see it in a few numbers.
Start with average B2B order size and how it trends. Then watch reorder cadence. If a company reorders every 30, 60, or 90 days, that's your stability showing up on paper. Track your deposit rate too, especially if you offer personalization. Deposits are working capital.
I also want you tracking days-to-cash. Deloitte has emphasized how teams that focus on DSO and days-to-cash manage risk better than teams chasing top-line numbers.
Finally, keep a tight view on contribution margin by channel. B2B can look "lower margin" when you forget to price in customization, shipping, and service. Price it correctly and it becomes one of the cleanest channels you have.
Start now, while you still have momentum
If you're waiting until DTC "stabilizes" to start B2B, you're waiting for a moment that rarely comes. DTC is dynamic by nature. That's not a problem. It's just reality.
B2B gives you another pillar. Bigger baskets. Better terms. Higher LTV. A calmer planning cycle. And in some cases, distribution that you didn't have to pay Meta for.
Start small. Run the 50-business sprint. Pick the niche that responds. Overdeliver. Then land and expand.
Life can be a roller coaster - hang tight and enjoy the ride.
FAQs
How does B2B revenue quality differ from DTC for valuation?
B2B revenue is structurally superior due to predictability. While DTC fluctuates, 70 - 90% of B2B customers place recurring orders on set cycles (Source: Gartner). This stability increases your LTV and makes your business an easier asset to underwrite, moving you away from the fragility of algorithm-dependent sales.
Won't offering Net 60 terms to wholesale clients kill my cash flow?
It shouldn't, if you use leverage. While most B2B invoices are paid on Net 30 or Net 60 (Source: Dun & Bradstreet), you can bridge this gap by negotiating upfront deposits for customization. Optimizing this working capital can drive 4× the profit impact compared to chasing revenue growth alone (Source: McKinsey).
How do I balance B2B bulk orders without causing DTC stockouts?
You must ring-fence inventory. Stockouts are not a 'good problem' - they drive away 10 - 20% of potential customers and increase future acquisition costs (Source: Harvard Business Review). Use historical data to predict DTC needs and only commit surplus stock to B2B, or align B2B production runs separately.
Is the lower gross margin on B2B orders worth the trade-off?
Yes, because you save on CAC. High-growth consumer brands typically spend 15 - 20% of revenue on marketing (Source: CNBC/PwC). B2B orders usually bypass this cost entirely. When you remove ad spend and bulk shipping efficiencies, the contribution margin often equals or exceeds DTC transactions.
Do I need a large sales team to execute a 'Land and Expand' strategy?
No. Start with a founder-led sprint targeting specific institutions. Landing a single branch is your wedge. Expanding to other locations within the same firm can drive up to a 3× increase in transactions (Source: Harvard Business Review). This organic multiplication builds revenue faster than hiring a cold-outbound sales team.
