7 Questions Every DTC Brand Buyer Must Ask Before Making an Offer

Most acquisition mistakes are traceable to questions that weren't asked — or were asked but not pushed on when the answer was evasive. The seven questions below aren't a comprehensive due diligence checklist. They're the specific questions that, answered honestly, would have prevented the most common categories of DTC acquisition failure.

1. What is the actual net revenue after all refunds, returns, and chargebacks?

This is the most fundamental question in DTC due diligence, and it's surprising how often it goes unasked at the LOI stage. Many sellers — not necessarily dishonestly — quote gross revenue. The gap between gross and net can be 10–20% in product categories with meaningful return rates (apparel, beauty, tech accessories).

How to verify: Shopify API net revenue, cross-referenced against Stripe settlement statements. These two numbers should reconcile to within a few percentage points. Any larger discrepancy needs a specific explanation.

2. What percentage of revenue comes from repeat customers?

This single metric is the most predictive of post-acquisition performance. A brand where 40%+ of revenue comes from customers who have previously purchased has demonstrated product-market fit at a level that transcends any particular acquisition channel. A brand where 85% of revenue comes from first-time buyers is perpetually dependent on paid acquisition to maintain revenue — and paid acquisition costs are going up, not down.

How to verify: Shopify customer-level purchase data, pulled via API. Request the distribution of customers by order count (1 order, 2 orders, 3+ orders) and the revenue attributed to each cohort.

3. What happens to this business if you completely step away on day 31?

Not "what's the transition plan" — that question gets the polished answer. Ask specifically about the 31st day, after the standard 30-day transition, when the earnest goodwill of a recent close has worn off. Which processes require the founder's judgment or relationships? Which supplier conversations are currently happening in the founder's DMs? Which influencer relationships exist because of personal friendship?

A good answer identifies the real dependencies candidly and proposes a specific mitigation for each. An evasive answer is a red flag.

4. What does the paid acquisition economics look like at 2x your current spend?

Many DTC brands have optimised their advertising to a sweet spot of efficiency — a spend level where ROAS looks great but which hasn't been stress-tested at scale. If you plan to grow the business post-acquisition, you need to know whether the acquisition economics hold at higher spend levels. The answer is frequently "no" — and that changes your projections materially.

How to probe: Ask for ROAS or CAC data broken out monthly for the last 12 months. Look for whether efficiency has been degrading as spend has grown. Ask directly: "What happened the last time you tried to significantly scale ad spend?"

5. How concentrated is the supplier base, and what are the terms?

The single most common operational surprise post-close is a supplier issue that the founder was managing through personal relationship. The three most dangerous supplier configurations: a single manufacturer producing your core SKU with no written contract; a supplier who is also a competitor (common in supplements, where manufacturers often produce similar private-label products for multiple brands); and a supplier relationship that was built on personal friendship that doesn't transfer to a new owner.

Ask to see the supplier agreements. If they don't exist, make creating them a condition of close.

6. Have there been any customer complaints, regulatory notices, or product liability events in the last 24 months?

This question surfaces the legal and compliance risks that don't appear in the financial data. For health, wellness, and food brands specifically: FDA warning letters, FTC complaint history, class action inquiries, and unresolved product liability claims are all potential dealbreakers that need to surface before close — not after, when they become your problem.

Ask the question in writing (in the LOI or formal diligence questionnaire) so the seller's answer is documented. A seller who misrepresents compliance history in a written document has created a foundation for indemnification claims.

7. Who are your top 10 customers by lifetime value, and what would need to happen for them to stop buying?

In B2C DTC, "customer concentration" often isn't obvious from aggregate metrics. But many DTC brands have a cohort of high-LTV super-buyers — customers who've spent $5,000–$20,000 with the brand over several years and whose continued purchasing habits are disproportionately important to revenue. Understanding who these customers are and what makes them loyal (and what could make them leave) is crucial to projecting post-acquisition performance.

This question also surfaces any B2B or wholesale revenue that might be flowing through the retail Shopify account — single large "customers" who are actually wholesale buyers are a concentration risk that blended retail metrics completely obscure.