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TLDR;
The “pick one channel and dominate it” era is over. Today’s best CPG brands treat DTC, marketplaces, and retail like instruments in the same band. Each playing a part in one powerful performance. This guide shows how to design your perfect channel mix, balance profit and control, and scale in harmony across every shelf.
Your customers don't care where you sell. They care how you show up.
They expect your story to stay consistent and compelling whether they meet you in person, on TikTok, on Amazon, or on Target shelves. The best brands aren’t picking one channel; they’re syncing DTC, marketplaces, and retail into one seamless performance. Think GarageBand on expert mode with guitar, drums, and vocals perfectly in time. A power ballad, if you will.
If your DTC site tells one story, your Amazon listing another, and your retail packaging screams something else entirely, you’re not building a brand. You’re running three separate businesses that happen to share a logo.
The next generation of CPG growth leaders isn’t pledging loyalty to a single channel. They’re engineering ecosystems, orchestrating the greatest setlist ecommerce has ever seen. This guide breaks down how to design a channel mix that plays to your strengths, backed by real examples and Neato’s 2P+ approach to scaling without splintering your brand.
The Channel Choice Dilemma
Why "pick one and dominate" doesn't work anymore
Let's kill the myth right now: there is no single "best" channel for CPG brands.
DTC-only brands hit a ceiling when CAC (Customer Acquisition Cost) climbs past 50% of AOV and paid media becomes a treadmill you can't step off. Marketplace-only brands watch their margins erode and their brand story get buried under bullet points. Retail-only brands bleed cash on trade spend while waiting 90 days to see if anything actually sells.
Every channel has a ceiling. We've seen brands go from $10M to $50M in revenue and still have no idea which channel actually made money. The brands breaking through aren't picking sides. They're building balance.
But here's where most brands get it wrong: they treat channels as separate businesses. One team runs DTC. Another team owns Amazon. A third team handles retail. Different strategies, different metrics, different messaging. Finance sees one margin story, marketing sees another, ops just sees chaos. And suddenly, your brand isn't a brand anymore. It's a collection of disconnected storefronts.
At Neato, we believe that your channel strategy should amplify your brand, not fragment it.
Quick Gut Check:
Are your DTC and Amazon listings telling the same story?
Do your margins improve when channels interact, or stay siloed?
Does your team measure growth per channel or total brand health?
Can a customer recognize your brand across every touchpoint?
If you hesitated on any of these, your brand’s not multi-channel — it’s having an identity crisis.
The goal isn't to "be everywhere." It's to show up everywhere with intention, coherence, and a plan for how each channel ladders up to your larger brand vision. You can't tell investors a growth story that your channels can't support.
By 2026, 65% of CPG leaders say they'll rely on a multi-channel mix, not a single hero channel.
The question isn't whether you'll go multi-channel. It's whether you'll do it strategically or reactively.
The Three Roads: DTC, Marketplaces, and Retail
The real pros, cons, and costs of each path
Let's be clear about what each channel actually delivers and what it can't. Because the point isn't to rank them. The point is to understand their roles in a cohesive brand strategy.
DTC (Direct-to-Consumer)
Strengths: This is your brand lab. You control the creative, own the customer data, keep the full margin, and test new positioning without asking permission. Want to A/B test messaging? Launch a limited drop? Build a community? DTC is where you move fast and learn faster.
Challenges: High CAC that keeps climbing. Limited reach. You're building traffic from scratch. Complex logistics as you scale. Most DTC brands see 20-30% repeat rates, meaning you're constantly chasing new customers just to stay flat.
Best for: High-margin products, brands with strong content engines or communities, subscription models, products that need education.
→ Takeaway: DTC isn't about volume. It's about learning. Use it as your lab, not your empire. Together, these three lanes make up the real commerce highway, but most brands are still driving in just one.
Marketplaces (Amazon, Walmart, Target)
Strengths: Built-in trust from millions of shoppers. Massive reach without paid media costs. Conversion rates 3-5x higher than DTC. Fast feedback loops through reviews and search performance. This is where intent meets purchase.
Challenges: Algorithm dependency. Limited customer data. Pricing pressure from competitors. Review volatility. And if you're in 1P, you've handed Amazon control of your pricing and margins. If your Amazon bullets sound like an intern wrote them, your brand is losing trust at the point of conversion.
Best for: Scalable SKUs, repeat-purchase categories, early-stage brands building proof of demand, brands ready to convert high-intent shoppers at scale.
→ Takeaway: Marketplaces aren't where you tell your origin story. They're where you convert demand. You don't chase. You attrack.
Retail (In-Store & Omnichannel)
Strengths: Credibility. Mass exposure. Shelf presence that signals you're a "real" brand. Access to retail media networks. For many categories, physical retail still drives 60-70% of CPG sales.
Challenges: Lower margins (30-50% off the top). Long planning cycles (6-9 months out). Supply chain complexity. High upfront costs. If your velocity doesn't hit targets, you're getting pulled.
Best for: Mature brands with proven demand, distribution-ready ops, categories where touch/taste/trial matter. Brands with high marketplace velocity are 4x more likely to land retail buyers.
→ Takeaway: Retail is your credibility play. This is not where you experiment. This is your time to prove you can scale what's already working.
The Neato belief: Channels aren't competitors — they're collaborators.
DTC teaches you what messages work. Marketplaces prove what SKUs convert. Retail validates that you can move volume. The brands winning this game let each channel inform the others. One cohesive strategy, adapted to fit each context.
Master the Multi-Channel Mix
Before you decide where to pour budget or build your next channel, you need a clear read on how your brand is wired to grow. Not legacy advice. Not guesswork. Not what another founder swears worked for them.
This is your Channel Mix Scorecard. A simple, five-factor diagnostic that reveals the strengths (and blind spots) shaping your channel strategy.
Score each from 1 (low) to 5 (high), then total your points to understand which channel should lead, which should support, and where you may need a partner to scale cleanly.
Let’s break it down.
1. Purchase Frequency
How often customers buy again and how easily you can remind them.
Low scores mean one-off purchases (coffee makers, furniture); high scores mean recurring or habitual buys (snacks, supplements, pet).
Insight: High frequency = marketplace scale potential. Low frequency = storytelling and education matter more.
2. Education Requirement
How much context or explanation your product needs before purchase.
Low = "They already know what this is." High = "We need to teach them why this matters."
Insight: The more you educate, the more DTC control you need to build trust before you scale.
3. Operational Muscle
How strong your ops are at handling fulfillment, logistics, and complexity.
Low = "We're still figuring out 3PLs."
High = "We can forecast, ship, and restock without panic."
Insight: Operational maturity is what separates brands that dabble in Amazon from those that dominate it.
4. Storytelling Strength
How effectively you connect emotionally and visually with customers.
Low = "We sell a product." High = "We sell an idea and people rally behind it."
Insight: Storytelling builds brand equity, which lowers CAC and wins retail buyers before you even pitch.
5. Capital Flexibility
How much financial runway you have for testing and customer acquisition.
Low = "We need cash flow now." High = "We can afford to test channels strategically."
Insight: Budget determines patience. No cash cushion? Choose channels that pay back fast (marketplaces).
Your Score: What It Means
20–25 → DTC-Led Hybrid: You've got margin, story, and capital. Use DTC to validate demand and build first-party data, then expand to marketplaces for scale once retention is dialed in.
👉 Play offense with storytelling, then systemize scale.
15–19 → Marketplace-Led: Operationally sharp, product speaks for itself. Use marketplaces to build velocity and social proof, then add DTC for retention and retail for credibility.
👉 Let data do the selling. Not just ads.
10–14 → Retail-First or Balanced: Your category lives on shelves and ops can support distribution. Use DTC and marketplace learnings to de-risk your retail expansion.
👉 You win when execution beats experimentation.
Below 10 → 2P+ Partnership Recommended: Your product's strong but ops bandwidth is limited. If you've outgrown your 3P setup or can't make 1P margins work, 2P+ gives you scale without chaos.
👉 Protect the brand, outsource the complexity.
Your channel mix should mirror your category reality and core strengths, not someone else's playbook. You're not choosing a lane. You're designing an ecosystem. Play to your advantage, and partner where you're weak.
Brands That Found Their Channel Sweet Spot
Poppi: From TikTok to Target — how DTC storytelling earned shelf space
The Play: Started DTC to build community and test messaging with early adopters. Used TikTok virality to prove demand wasn't just hype — it was scalable. Then moved to Amazon for reach and conversion, using social proof from DTC to fuel marketplace growth. Finally, landed in Target with years of velocity data and a built-in fanbase ready to buy in-store.
📊 Result: DTC built the brand. Amazon proved the business model. Retail delivered mass scale. By Q3 2023, Poppi was moving over 1 million cases per month in retail, but the foundation was DTC storytelling that carried through every channel.
💡 Lesson: Let each channel amplify the others. DTC isn't separate from retail. It's the proof that gets you on the shelf.
Chomps: The Amazon-first brand that mastered feedback loops
The Play: Went marketplace-first to own the "healthy protein snack" search on Amazon. Built reviews, optimized listings, and scaled with sponsored ads. Used Amazon data to identify hero SKUs and customer preferences, then built DTC retention loops around those insights. Expanded into retail with velocity proof that gave buyers confidence.
📊 Result: A 2P+ partnership streamlined Amazon operations, freeing the internal team to focus on brand, retail expansion, and DTC growth. Chomps now does 8 figures on Amazon while maintaining brand coherence and healthy margins across all channels.
💡 Lesson: Marketplaces aren't just distribution. They're data engines. Let Amazon tell you what's working, then apply those insights everywhere else.
Blueland: How DTC education funded a retail revolution
The Play: DTC-first to educate shoppers on a new behavior (refillable cleaning products). Once they had proof of concept, tested on Amazon to validate conversion and gather feedback at scale. Used learnings from both channels to pitch Target with confidence — backed by years of customer data showing exactly which SKUs moved, what messaging worked, and how to position against legacy brands.
📊 Result: By the time Blueland landed on Target shelves, they weren't guessing. They had DTC storytelling, Amazon conversion data, and marketplace reviews to de-risk the retail launch.
💡 Lesson: Build your retail pitch on multi-channel data. Don't go to Target with a hypothesis. Go with proof.
The throughline: Each channel validated the next. None existed in isolation and that's exactly how omnichannel growth compounds.
Why 2P+ Is the Future of Channel Strategy
Here's the problem with how most brands approach multi-channel: they treat it like they're running three separate businesses.
One team owns DTC. Another team owns Amazon. A third team handles retail. Different P&Ls, different strategies, different messaging. And suddenly your brand isn't coherent anymore. It's fractured.
The old model:
1P (Vendor Central): You're selling to Amazon, not on Amazon. You lose control over pricing, promotions, inventory, and brand experience.
3P (Seller Central): You're in control, but doing everything yourself. Listing optimization, inventory management, ad strategy, compliance, customer service. It's a full-time job most brands under-resource.
DTC alone: You're paying for every click, every customer, forever.
Retail alone: You're bleeding cash on trade spend, waiting months to see results.
Each model works in isolation until it doesn't. And when brands try to run all three at once, they end up with channel conflict, inconsistent messaging, and a team stretched too thin to do any of it well.
Old World vs. New World
Old Model | New Model (2P+) |
1P or 3P silos | Unified channel management |
Reactive, channel-specific decisions | Data-driven portfolio planning |
Volume-only goals | Margin + brand control + coherence |
Channel conflict | Channel collaboration |
Fragmented brand experience | One brand, everywhere |
Guesswork on what's working | Real-time cross-channel insights |
The result: You scale faster because your channels feed each other instead of competing. You protect margins because you're making strategic decisions, not reactive ones. And you build a brand, not a collection of disconnected storefronts.
Multi-Channel ≠ Multi-Brand
The future isn't about choosing sides. It's about controlling your narrative across every shelf. 2P+ isn't a workaround; it's an evolution. It gives operators control without chaos and brands scale without dilution. It's not just selling smarter. It's scaling sanely.
2P+ brings control back to the brand while retaining the scale and efficiency of marketplaces — without fracturing your brand identity.
Here's how it works:
You stay in the driver's seat on strategy, positioning, pricing, and brand vision. Neato handles the operational execution: catalog management, compliance, advertising optimization, logistics coordination, and growth strategy across Amazon, Walmart, retail media, and beyond.
Think of it as the neural bridge between channels. One unified brand strategy. One source of truth for performance data. One team coordinating how DTC informs marketplace strategy, how marketplace data informs retail pitches, and how retail presence amplifies DTC conversion.
You're not running three businesses. You're running one brand that shows up coherently everywhere your customers are.
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