How DTC jewelry brand Dorsey is growing profitably

Since launching in late 2019 Dorsey has hit eight-figure revenue and seven-figure profitability. Last year Dorsey sold over 1.7 million lab-grown stones, amassing waitlists of 35,000 people. The company’s projected 2024 year-over-year growth is expected to be 100%. According to Dorsey’s founder, early decisions like maintaining low customer acquisition costs and building a loyal customer base with high retention rates set the company on the path to profitability.

Set out with profitability in mind

Dorsey founder and CEO Meg Strachan told Modern Retail that figuring out a way to grow profitably was a result of her past marketing jobs at venture-backed brands like Girlfriend Collective, Anine Bing and Goop. 

“Most of my background is in building direct-to-consumer companies, both as a consultant and in-house executive,” Strachan said. “Much of this was during the DTC heyday when companies were able to raise a lot of money and use it to acquire customers.” 

At the time, she said, “nobody was talking about profitability,” and most companies were attempting to grow 100% year-over-year at all costs, in hopes of achieving an exit. “What investors started with and what they want now are very different,” she said. “And changing the direction of the ship is very difficult to do.”  

“I’ve been the person who couldn’t get a paycheck because the company couldn’t raise money, and that changes you,” she said.

So when Strachan started building the brand in 2019 and wasn’t able to raise funding, she saw an opportunity to unlearn the cash-burning tactics many DTC brands deployed. Early on, Strachan built out the website and figured out fulfillment herself until the brand reached $1 million in revenue. At the time, she was also the full-time vp of growth at Girlfriend Collective.

By 2021, when the brand began reporting triple-figure year-over-year growth, investors began to reach out to Strachan with an interest in investing. She raised $1 million in seed funding, which allowed her to finally run Dorsey full-time. 

Marrying brand and performance marketing 

From her experiences, Strachan said instead of focusing on hyper-growth, she chose to largely bootstrap the brand and operate with a lean team. The company declined to disclose its exact employee number, but said the team “is growing the team at the appropriate growth rate related to the business.”

She also chose to marry the brand marketing and performance marketing functions under one team. At previous companies, Strachan felt that the brand marketing and growth marketing teams were siloed, creating a disjointed marketing playbook.

Another critical piece of Strachan’s approach to marketing is being profitable on every first order. It’s something many venture-backed DTC startups sacrificed by giving customers first-order discounts in the hope they come back later. Strachan said that in most cases that’s not what happens, especially with high-ticket categories like jewelry.

“We’re a full-price business,” she said. The brand experimented with discounting early on, but now the brand doesn’t do any first-time discounts or holiday promotions.

Dorsey acquires a big percentage of its customers through Instagram, affiliate marketing and traditional channels like press, email and SMS marketing. “These ebb and flow based on the time of year,” she said.

“We don’t have capped budgets in any channel, as long as we’re acquiring customers based on our targeted CAC,” she said. The marketing budget increases annually, based on year-over-year growth. But Strachan said the company isn’t currently losing money on any channel. 

Aesthetics also plays a big part in helping Dorsey stand out from the many DTC jewelry brands. “Everything we do is contextualizing jewelry, we lean into it from a fashion perspective,” Strachan said. Most lab-grown diamond brands focus on engagement jewelry, which Dorsey doesn’t currently offer (but has plans to roll out later this year).

The company produces 20 to 30 photoshoots a year to emphasize seasonality. Many images focus on how to style Dorsey’s pieces. “Our best products are shot 12 to 20 times a year,” Strachan said. The brand doesn’t promote much user-generated content, instead opting for these fashion-focused creatives.

Celebrities have also helped build brand awareness. Dorsey doesn’t invest in any paid celebrity partnerships, but has gained red carpet visibility through stylists who were early fans of the brand. For example, Bella Hadid wore a pair of Dorsey earrings at the 2022 Met Gala, but the company only found out about it after the fact. Other fans include Hailey and Justin Bieber, who wore Dorsey’s Kate necklaces on his most recent tour. 

Victoria Brynner, a luxury brand advisor who’s worked with Chanel and Dior, said for younger shoppers, brand image and perceived value play a big part in their higher-end purchases. Beyond the number of followers, Brynner said strong social media imagery and clear product positioning can give potential customers a sense of trustworthiness, especially in a sea of online jewelry brands. 

However, “if you’re a smaller brand, celebrity marketing would be a challenge, simply because so much investment has to go into growing the brand,” Brynner said.

To stay ahead of the competition, Dorsey plans to expand its assortment of fashion-forward jewelry.

Last summer, Dorsey launched its first 14K fine jewelry featuring lab-grown diamonds, which are priced much higher than sapphires. The diamond assortment is still new, but Strachan says the growing interest in lab-grown diamonds is expected to fuel its growth. The goal is for 50% of sales to eventually be in lab-grown diamonds to build on the popularity of Dorsey’s lab-grown sapphires.

Last year, the brand debuted a custom Rivière necklace and bracelet program and entered the ring category. This year, Strachan said the company will also be diversifying its pricing. “We’re doing custom stone cutting, and soon people will be able to build a Rivière necklace or bracelet at various price points,” Strachan said.

Overall, Strachan said, maintaining profitability is about shifting mindsets. “You don’t have a beautiful office or kombucha on tap until you’ve earned it, it’s a very old business principle we’re getting back to,” she said.