Distribution strategy is one of the most consequential decisions a brand can make, and one that I believe is not discussed enough. When brands get it wrong, the damage is not immediately visible. It shows up quietly, months or years later, in margins that don’t make sense anymore, in low brand equity or damaged relationship with partners.
After years working in ecommerce, I have seen the same mistakes happen frequently, across industries, company sizes, and experience levels. Here are the most common four patterns, or the four traps of distribution strategy.
Trap #1: The imitation trap
Many brands blindly copy their competitors distribution strategy. It feels logical and safe, but is often a mistake.
When you see a competitor selling successfully on let’s say Amazon, it feels natural to follow them. They figured it out, so why reinvent the wheel? But there are a few things you don’t know about their situation that make their decision very different from yours.
You don’t know when they joined. A brand that entered Amazon in 2016 built reviews organically, paying much less than today’s fees advertising costs. You are not replicating their decision, you are making a new one in a completely different environment, which will most likely land you very different results.
You don’t know their unit economics. They may sell 1P on very favorable terms, have volume discounts, or a cost structure built over years that you don’t have. Maybe their CAC is ridiculously low or their work with affiliates that are performing extremely well at low commissions rates.
You don’t know if they are actually profitable. Revenues, rankings, reviews and social media following don’t always is not the same as a healthy business.
And you definitely don’t see the brands that tried the same thing and failed. Their DTC channel was shut down, and their marketplaces listings are buried under hundreds of other listings. Copying competitors means building your business case on survivors, not on a representative sample of everyone who tried.
Sometimes following competitors into a channel is the right thing to do, but it should never be an automatic decision.
Trap #2 : The convenience trap.
Some of the most dangerous business mistakes don’t come from bad ideas, but from good ones that worked in a different environment.
When a playbook delivers results, it feels logical to apply it to the next product, brand, or opportunity. You think your experience will get you even better results, but things don’t always work that way.
For example, the channel that worked for your premium brand on Shopify will not automatically work for your more budget oriented brand. Despite being the same company with the same expertise, the economics units and target customers may be completely different. Premium buyers search for quality brands and are willing to find you, while budget buyers type a category name into Amazon and buy whatever has the most reviews.
But I found that there is another deeper issue that people never talk about. The manager running that second launch probably felt something was off. They just couldn’t say it: they were hired to replicate success, not to question the decision. If the familiar strategy fails, there are always external factors to blame. But the day you propose something new and it fails, you have to own the mistake.
This convenience trap can be difficult to avoid, because it does not always come from management laziness. More often, there are strong organizational incentives that pushes people toward the wrong decisions.
Trap #3 : The economics trap
In life, nothing is certain except death, taxes, and every sale channel looking better from the outside than it does from the inside.
Let’s look at TikTok shop for example. From the outside and based on some LinkedIn influencers, it looks like free money. That is until creator commissions, platform fees, and fulfillment costs kill your margins. It is the same thing for every channel, retail can look attractive until you see the chargebacks policies, the mandatory marketing contributions, the net-60 payment terms…
You fall into the economics trap is when you chose a channel, not being aware of what the true costs to operate really are.
Every manager should answer these questions when considering a new channel.
What does the full P&L look like, not just the gross margin? Where does CAC need to to make sense, and does the LTV and AOV justify it? How long before the channel is profitable, and do you have the capital to get there? Have you fully read and understand the terms in the vendor agreement?
Answering these questions take time, but a channel misfit is much harder to fix once you have committed resources and budget.
Trap #4 : The shiny object trap
If you have a decade or more of experience in ecommerce, you know the drill. Every few years, a new channel or tech launches, and is so overhyped that even experience managers wonder if they are falling behind.
The metaverse was the next revolution and would replace retail stores, while NFTs would be a key part of brand-customer relationships. Agentic commerce may or may not be the current version of this conversation. And some of these will matter eventually
I have been there, reading the news articles about the next gold rush, early success stories on LinkedIn, or even seeing competitors making a move. The fear of missing out is powerful, and not completely irrational, as early mover advantage can be real in some cases. The problem is that this advantage rarely exists
The other issue is product fit. Even channels that do take off don’t work for every product. TikTok Shop was one of these hyped channels, but turned out to become a real channel with strong volume. However, it also requires a product that drives impulse purchases, looks great in short video, and and/or is priced low enough.
Watching these new opportunities is important, but decisions must be made on real signals and analysis, not just based on hype.