How should a board evaluate Amazon, DTC and wholesale channel mix?
Answer: Channel mix should be evaluated as an enterprise-value decision, not as a contest to maximize any single channel. Amazon, DTC, wholesale and other marketplaces can produce different margins, working-capital needs, data access, customer relationships and strategic dependencies. The best mix is the one that produces attractive economics while preserving enough control and resilience for the company’s strategy. Boards should challenge channel expansion that adds revenue but weakens contribution, creates conflict or increases concentration without a clear return.
Why this matters
Channel decisions shape profit quality, capital intensity and bargaining power. They can also create distribution incentives that later become difficult to unwind.
What the board should examine
- Contribution and cash needs by channel
- Customer acquisition role of each channel
- Channel conflict and pricing effects
- Inventory allocation
- Platform and retailer concentration
- Strategic role in the investment thesis
What good looks like
Management can state why each major channel exists, what economics it must produce, and how the portfolio of channels improves value rather than simply adding volume.
Related questions
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