Choosing the Right Sales Channel.

The uncertainty surrounding tariffs is causing considerable angst for businesses, both large and small. I consult for a housewares company that has seen its supply chain disrupted and COGS skyrocket. As part of our response to this, we’ve been discussing potential new sales channels with higher margins to reduce the pain of higher costs.

So I thought it might be timely to discuss sales channels, which might be best for your business, and how to evaluate each one.

Selecting the right sales channel is one of the most consequential decisions you can make. It determines how you reach your customers, how you manage costs, and how quickly you can scale. The choice is rarely “one size fits all.” The best channel depends on your product type, margins, customer expectations, and operational capacity.

Let’s review the various types of sales channels, and who should choose them…

Direct-to-Customer (DTC)

Best for: High-margin products, subscription-based services, and brands that benefit from direct customer relationships (e.g., specialty food, fashion, software-as-a-service).

Criteria: Choose DTC if you require tight control over the customer experience and can manage marketing, fulfillment, and support in-house. This works well when you have a clear target audience and can reach them cost-effectively via digital channels. For example, artisanal skincare brands often thrive selling directly through their e-commerce sites, as they can tell their story and control pricing without retailer markups.

Retailers

Best for: Products that benefit from customer touch-and-feel before purchase or that need instant credibility (e.g., consumer electronics, home goods, premium packaged foods).

Criteria: Retailers make sense when your product is differentiated but still needs discovery in high-traffic environments. You need the margins to accommodate wholesale pricing and the ability to produce in consistent volumes. Consumer electronics startups often enter through specialty stores to validate their product before approaching national chains. Keep in mind retailers expect reliable supply, consistent packaging, and marketing support.

Resellers or Distributors

Best for: B2B products, industrial goods, and services where customers value an established relationship with a trusted vendor (e.g., IT hardware, construction supplies, specialized software).

Criteria: This route is effective if your buyers already have established purchasing habits and you lack the resources to build a dedicated sales force. Distributors provide instant reach to a broad customer base but take a significant margin. You must ensure your product fits their portfolio and offers them an incentive to prioritize it over competitors’ offerings. A SaaS tool for small manufacturers might partner with an industry-specific software reseller who can bundle it with other solutions.

Making the Decision

List your constraints and advantages: budget, sales expertise, production capacity, and desired customer proximity. Then map each sales channel to these factors. Many businesses start with one channel and layer in others strategically. Avoid chasing all channels at once. A focused, well-executed approach in the right channel will beat a scattered presence in three.

The Takeaway.

Choosing the right sales channel—DTC, retailers, or resellers—depends on margins, customer preferences, and operational capacity. Match your product type to the channel’s strengths, start focused, and use a checklist to ensure alignment with your goals and resources.

What about you? How do you evaluate and choose sales channels for your products or services? Please comment – I’d love to hear your thoughts.

Also, please connect with V2R on LinkedIn.

Thanks,
Tom Myers