What's Inside
Compare the operating model, not just the revenue
DTC gives you customer data and control, but you fund acquisition, fulfillment, returns, and service. Amazon gives you reach and a different demand signal, but fees, inventory placement, and platform rules change the economics. Retail gives you scale and credibility, but introduces compliance, deductions, distributor layers, and longer cash cycles.
There is no universally best channel. There is a channel mix that fits your product, margin, supply chain, and current capability.
A simple channel decision matrix
| Dimension | DTC | Amazon | Retail / wholesale |
|---|---|---|---|
| Demand signal | Customer orders and campaigns | Marketplace velocity | POs, forecasts, replenishment |
| Main operational burden | Pick, pack, returns, service | Fees, placement, platform rules | Compliance, routing, deductions |
| Cash question | Acquisition before conversion | Inventory and fees | Terms and inventory funding |
| Best use | Learning and relationship | Reach and conversion | Scale and credibility |
Model the full cost to serve
Net revenue
Start after discounts, promotions, marketplace fees, commissions, distributor terms, and deductions.
Variable fulfillment
Include pick and pack, shipping, returns, storage, prep, customer service, and channel-specific requirements.
Inventory and cash
Model lead times, minimums, safety stock, payment terms, and the cost of carrying product between order and cash.
Management load
Count the people, systems, and exceptions required to run the channel. Operational complexity is a cost even when it is not on a vendor invoice.
Choose the next channel by readiness
Before adding a channel, ask whether the operation can support the service promise. Do you have the data, inventory, packaging, fulfillment, compliance, and cash required? If not, the next channel may be a distraction disguised as growth.
A good channel plan names the trigger for expansion and the stop condition. That keeps the business from adding complexity simply because an opportunity appeared.
Operator rule. A channel is attractive only after you understand what it costs to serve an order there.