Five DTC margin traps that look like growth

Ecommerce founders track revenue obsessively and margin loosely. That's how you end up at $2M revenue and net-negative gross margin. The five traps that consistently destroy DTC unit economics while looking like growth.

Trap 1 — Discount stacking

What it looks like: 20% off welcome code + free shipping + 10% off bundle + 15% off subscribe-and-save. Each individually defensible; together, your effective price is 45% off list.

The fix: codify a maximum stack. "No more than two discounts on the same order, totalling no more than 25% off." Most platforms (Shopify) let you enforce this server-side. Set it once, enforce it everywhere.

Trap 2 — Paid acquisition without LTV truth

What it looks like: Meta ads at $25 CAC, AOV of $45, gross margin of 50% = $22.50 contribution. Looks fine. But that calculation ignores returns (which costs you 20% of contribution), free shipping (another 10%), discount stacking on first order (another 10%), and payment processing (3%). Your real first-order contribution is closer to $11 — and your CAC is $25.

The fix: model CAC payback against true contribution, not list price contribution. If first-order CAC payback is over 12 months, scaling paid acquisition is borrowing from the future to pay for growth today.

Trap 3 — Bundle math that loses money

What it looks like: bundling three SKUs at a 15% discount to lift AOV. The bundle "averages out" the gross margin, but if one SKU is high-margin (60%) and two are low-margin (25%), the blended bundle margin can be lower than selling just the high-margin SKU alone.

The fix: compute bundle margin per SKU composition before launching. Reject bundles whose blended margin is below your floor. AOV lift is meaningless if margin per order drops.