Channel economics
One company on the P&L. Four businesses underneath it.
Same products, same warehouse, same people. Each channel tends to earn differently, spend differently and pay you back on a different clock. The pattern below is a typical one, not a rule; the work is seeing your own version of it side by side, so you can decide which channel to feed.
Swipe to see all four channels.
Direct to consumer often has the best gross margin and the thinnest contribution, because every order is bought with advertising. It tends to be where the brand gets built.
Custom can give up gross margin to larger orders and to labor, and get it back in contribution, because there's little marketing underneath it. Often the customer pays up front.
Wholesale usually earns less per unit and more per dollar than either. The cost is the terms: sixty days is a loan you're making.
Distribution is typically the lowest price and often the best contribution. The same terms apply, at a bigger scale.
Which of these your business actually looks like is the first thing we work out. It usually isn't the one the P&L suggests.
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