/ Opening

Who Gets Paid Before It Reaches You?

The customer sees one product and one price. The value chain contains several businesses that must earn money.

RETAIL PRICE$120How many organizations touched the sale?

TAKEAWAYDistribution determines who performs the work, who owns the relationship, and who keeps the margin.

/ Vote

Who keeps the largest share of a $120 sneaker?

Choose the most likely answer. Exact economics vary by brand and channel.

TAKEAWAYThe final seller may keep a large share because selling the product requires costly work and risk.

/ The Chain

A product is also a chain of businesses

The exact route varies, but the functions remain.

RAW MATERIALInputs

→

MANUFACTURERProduction

→

BRANDDesign + demand

→

DISTRIBUTORAggregation + logistics

→

RETAILERAccess + sale

→

CUSTOMERPurchase

TAKEAWAYAn intermediary exists because it performs work the other parties do not want or cannot do efficiently.

/ Route Options

Wholesale, marketplace, or direct?

No route wins every dimension.

ROUTEREACHMARGINCONTROL / DATAOPERATING BURDEN

Wholesale retailHighLowerLowerShared

MarketplaceFastFee-dependentLimitedModerate

Direct-to-consumerMust buildPotentially higherHigherHighest

TAKEAWAYHigher gross margin does not mean easier or more profitable distribution.

/ The Hidden Work

Every channel performs work someone must fund

The work does not disappear when an intermediary does.

DEMANDTraffic, merchandising, sales

LOGISTICSStorage, pick-pack-ship, delivery

FINANCINGInventory and payment timing

TRUSTRetail environment, reviews, returns

DATACustomer information and feedback

SERVICEQuestions, issues, replacement

TAKEAWAYThe route to market changes both the economics and the customer experience.

/ Team Challenge

Choose the route to market

You are launching a premium hot sauce at a $16 target retail price.

LOCAL RETAIL

Fast trust and shelf access; wholesale price $9.

DTC WEBSITE

Keep retail revenue; pay $7 average acquisition and $5 fulfillment.

MARKETPLACE

Existing demand; 18% fee plus fulfillment costs.

CHOOSE: primary route · price · margin logic · customer-data plan · biggest risk

TAKEAWAYChoose a channel based on the work and risk the company can actually carry.

/ Pressure Test

The channel can strengthen or break the offer

A route that looks profitable in a spreadsheet may fail operationally or dilute the experience.

1.Who owns demand generation?

2.Who holds inventory and cash-flow risk?

3.Who controls price, presentation, and customer data?

4.What new capability must the company build?

TAKEAWAYDistribution strategy must match the company’s economics, capabilities, and desired customer relationship.

/ Example

Start where trust exists; learn before scaling complexity

A regional premium food product can use retail for discovery and DTC for retention and learning.

1. LOCAL RETAIL

Establish trial, credibility, and repeat behavior in a concentrated market.

2. DTC RETENTION

Use QR, email, bundles, and repeat purchase to build first-party relationships.

3. MARKETPLACE LATER

Add reach once reviews, demand, and operations are proven.

TAKEAWAYA channel sequence can be stronger than choosing one permanent channel for every job.

/ Close

Distribution shapes more than delivery

The route becomes part of the business model and the brand experience.

MARGIN

CONTROL

DATA

EXPERIENCE

TAKEAWAYEvery intermediary changes who does the work, carries the risk, owns the customer, and keeps the value.