Growth Decisions
DTC brand partnerships
Choose a DTC brand partnership around a customer need, then settle the offer, responsibilities, rights, customer promise and review measures.
A useful DTC brand partnership gives customers a clearer or more complete offer than either brand alone. Start with the customer task, pick a format that serves it, and agree who makes, sells and supports the offer before launch.
Choose the job before the partner
Name the purchase occasion and each brand's contribution. One brand may make the main item; another may supply a compatible accessory. Or both may develop a new version together. Ask what the customer gains and whether that gain is obvious without a long explanation.
Decide the project's aim: make an existing purchase easier, reach a relevant new audience, or develop a product neither brand could make alone. Each aim calls for a different commitment: a coordinated offer, a shared message, or joint product work.
Audience overlap can make a joint message relevant, but shared followers do not establish demand for a joint product.
Match the format to the commitment
| Format | What the customer buys | Main commitment to resolve |
|---|---|---|
| Joint promotion | An existing offer promoted by both brands | Accurate messages, permissions and channel ownership |
| Bundle | Existing products sold together | Compatibility, component stock, packing and returns |
| Distinct limited collaboration | A product or version developed for the project | Specification, production, claims, ownership and remaining stock |
In this comparison, a limited collaboration is a distinct joint product or version. A short sales window or small run alone does not establish a product difference or justify a higher price. If the benefit comes from using two existing items together, a bundle may serve the customer with less development work.
Check the partner and the offer
Compare candidate brands on buyer fit, product quality, dependable supply, service expectations and each side's work. Examine the proposed product and its limits, not just the other brand's audience. If customers expect the combined offer to work where one component cannot, resolve the mismatch before using both names.
Build a cautious order case. Record selling price, supplied components, development and packaging costs, dispatch, payment, expected returns and the agreed share of proceeds. Keep cash commitments and unsold stock visible. Revenue for both brands can still leave one carrying most handling cost.
Put decisions and rights in writing
Agree in outline which business sells to the customer and who owns product, fulfilment and customer-support duties. Document it so customers have an effective route to the seller when something goes wrong.
Agree how each name, logo and creative asset may be used, on which products and channels, for how long, and who approves changes. Identify pre-existing material and anything created together.
IP Australia advises collaborators to have a clear understanding about whether they will be using background or third-party IP and who will own and manage any project IP the collaboration creates.
Distinguish background IP, created before or outside the collaboration, from project IP created during it. Also identify any third-party IP, which belongs to someone outside the partnership.
For background IP, list relevant material each partner contributes, agree how it may be protected and used, and include any licences in the contract. If third-party IP is needed, its owner must agree to its use; set out the circumstances, timeframes and any proposed sublicensing in the licence.
Decide who will own and manage project IP, and who is best placed to protect and commercialise it. If both brands will own project IP, IP Australia advises seeking legal advice about how much each will earn from it. Even if no new IP is expected, agree how to handle it if it arises.
A non-disclosure agreement may help keep sensitive information confidential. This can be useful when discussing a proposed collaboration or sharing background material, before the brands have settled what will be created or who will own it.
The ACCC takes reports about possible anti-competitive communication and cooperation among businesses. It investigates possible anti-competitive contracts, arrangements, understandings and concerted practices, but does not mediate disputes between businesses. The brands should not treat it as a way to resolve a disagreement about the project.
Make one customer promise
A shopper should be able to identify the seller, exact contents, compatible versions, price, availability, delivery terms and help route. Check that descriptions, benefits, prices and delivery claims match the offer customers actually receive. Check safety and information requirements for the actual goods; applicable rules depend on the product.
Plan each brand's marketing separately. Agree whether and how customer information may be used or shared rather than assuming a partner's customer list is available to the other brand.
The ACCC can require businesses to back up claims about products or services and may investigate misleading claims or take compliance or enforcement action. Keep evidence for the claims used across both brands' product pages, packaging and promotions, and ensure the evidence relates to the offer customers actually receive.
Product safety responsibilities depend on the goods. The ACCC works with other regulators on consumer product safety and reviews mandatory standards, but it does not test products for compliance or advise which standards apply to a particular product.
Regulatory and compliance considerations for DTC brand partnerships
- ACCC regulation on misleading claimsBusinesses must back up claims with evidence; ACCC can investigate and take enforcement action
- Product safety responsibilitiesDepend on the goods; ACCC works with other regulators but does not test products
- Anti-competitive cooperationACCC investigates anti-competitive contracts or arrangements but does not mediate disputes
- Spam preventionFollow ACMA guidelines to avoid sending spam in promotions
Review the whole result
Before launch, agree a review window and the records each side can share. Count retained sales and contribution after agreed costs, then inspect returns, compatibility questions, dispatch exceptions and whether customers understood who supplied what. Compare new-customer interest with actual orders; do not call every attributed order an additional sale created by the collaboration.
At the review, decide whether to repeat, change or end the arrangement. Record remaining customer orders, support duties, stock and permitted use of joint creative.
In this guide
- Choosing a complementary brand for a joint productCompare potential co-brand partners on customer benefit, product fit, supply, claims and service before committing to a joint product.
- Agreeing on responsibilities in a co-branded launchAllocate product, stock, claims, checkout, customer support, IP and closeout duties before a co-branded offer opens for orders.
- Comparing a bundle partnership with a limited-edition collaborationCompare a joint bundle with a distinct limited-edition product on customer benefit, stock risk, product work and operating commitments.
- Measuring a collaboration beyond launch-day revenueReview a DTC collaboration using order contribution, shared project costs, customer understanding, service issues and demand evidence.
