Your route-to-market strategy has a massive impact on your long-term profitability and brand perception. However, it can also feel like a constant balancing act. You must juggle so many competing priorities between your own stores, franchise partners, and marketplaces. Each distribution channel operates under a different set of rules, expectations, and profit structures.
- Are you cutting corners on route-to-market because you don't see the full financial impact of your choices?
- Are you making route-to-market decisions based on what competitors are doing, instead of stepping back and figuring out what makes sense for your margins and brand strategy?
- Are you launching multiple sales channels without properly integrating your inventory systems?
- Are you so focused on getting products or services in front of customers that you don’t stop to think about whether your distribution model is profitable or sustainable?
This article provides strategies for your successful route-to-market.
Why expand your route-to-market?
A lot of retailers expand their route-to-market without fully considering the complexity it brings. But the reason they do it is simple: growth.
Expansion into new channels can open up new revenue streams, attract different customer segments, and create competitive advantages. Sticking to one route-to-market limits your ability to reach more customers and scale revenue.
Here are five reasons why route-to-market expansion is crucial:
- Customers are everywhere, so retailers need to be too.
Shoppers don’t buy the way they used to. They browse in-store, compare prices online, buy from marketplaces, and engage with brands on social media. If you only sell in one place, you’re missing out on potential sales where your target customers are actually shopping. - Route-to-market expansion diversifies revenue streams.
Relying too much on a single channel is risky. If you only have brick-and-mortar stores, what happens when foot traffic declines ? If you sell only through third-party marketplaces, what happens if the marketplace changes its commission structure? Expanding into franchising, e-commerce, or marketplaces allows you to spread risk across multiple channels. If one channel underperforms, the others can help balance revenue. - Integrated retail with all channels is the expectation now, not a nice-to-have.
Customers don’t think in terms of sales channels. They just expect seamless shopping experiences. Expanding your route-to-market creates a frictionless customer experience. If you don’t, customers will go to competitors who do. - Different routes-to-market maximize profitability.
Each route-to-market has different margin structures and cost implications. Smart retailers don’t just expand into new channels randomly—they use different channels strategically to optimize profitability. Retailers who get this right balance their channel mix so that each one complements the others instead of competing against them.
The real question is not whether to expand but how to do it profitably, designing a sales strategy that drives sustainable revenue, rather than just adding complexity for the sake of it.
Are you expanding strategically or reactively?
Some see a competitor launching a new channel and feel they must keep up. But this ignores whether this make sense for their business model or target market. They add complexity before they’ve optimized what they already have.
It’s like opening more doors without realizing you don’t have the resources to manage them properly. Every new route-to-market adds another layer of pricing, logistics, inventory management, and customer service challenges. And if a retailer doesn’t have a clear plan for how these channels should work together, they end up competing against their own offering.
Now, instead of growing revenue, they’re actually cannibalizing their own sales and making less money per transaction. The worst part? They did it to themselves.
So, start by asking the right questions before making a move.
Instead of thinking, “How do we add another sales channel?” ask “How does this new route-to-market fit into our overall revenue strategy?”
- Build a profitability model for each channel. This isn't just about listing fees or delivery costs, but about how adding a new channel impacts inventory, fulfillment, branding, and pricing power. Before you launch, you should be simulating best-case, worst-case, and realistic profit margins across all sales channels to see if the expansion makes financial sense.
- Get your pricing strategy in order.
One of the biggest mistakes retailers make when expanding is losing control of pricing across channels. You start selling through third-party marketplaces or franchise networks, and suddenly there’s no consistency in how products are priced. That’s how you end up with the same item selling for three different prices in three different places, confusing your target audience and damaging price perception. Before expanding, you need a clear framework for price governance. - Make sure inventory planning supports multiple routes-to-market.
This is where so many retailers crash and burn when they expand too quickly. They start selling in more places, but don’t have a solid inventory management system that can dynamically allocate stock based on demand in each channel. - Be brutally honest about what role each channel plays.
Not every route-to-market should have the same goal. Some channels should be optimized for customer acquisition, some for brand-building, and some for pure margin extraction. If you treat every channel like just another sales platform, you end up competing against yourself.
A retailer that prepares properly before expanding could avoid most of the revenue leaks and inefficiencies they struggle with today.
Facing the channel conflicts we've described?
You might be in the thick of it—dealing with price inconsistencies, shrinking margins, supply chain headaches, and channel conflicts. But that doesn’t mean you’re stuck. You can absolutely turn things around. And that’s where Simon-Kucher can help.
What we bring to the table is clarity. Instead of constantly reacting to the problems caused by multi-channel complexity, we help you regain control, optimize margins, and create a structured, data-driven approach to growth.
First, we help you understand the true profitability of each sales channel. If you're selling across company-owned stores, franchises, e-commerce, marketplaces, and wholesale, we map out where you’re making money and where you’re losing it. A lot of retailers don’t even realize that some of their sales channels are cannibalizing each other instead of adding incremental revenue. We bring those insights to the surface.
Then, we help you fix pricing inconsistencies. If you’re struggling with price perception issues, channel conflict, or constant discounting wars, we create a strategy that ensures every sales channel supports, rather than undermines, the overall pricing model. That means defining when, where, and how pricing should be adjusted, without sacrificing profitability or jeopardizing customer satisfaction. Inventory issues? We help you make smarter allocation decisions so you're not constantly overstocked in one place and running out of bestsellers in another. Instead of just reacting to shortages or excess stock, we help you start using data to predict demand and allocate inventory where it’s most profitable.
And beyond that, we help you turn your route-to-market strategy into an advantage. Franchises, marketplaces, or ecommerce sites don't need to be competing forces. When managed correctly, these different routes can work together to strengthen the brand, increase sales, drive revenue, and maximize profitability.
If you feel like you’ve lost control, Simon-Kucher can help you get it back. No retailer should have to choose between growth and profitability—you can have both.
Ready to fix your revenue leaks and take control of your growth? Contact Simon-Kucher's route-to-market retail specialists.
