Written by Julien Ricciarelli-Bonnal
10 September 2026
The Essentials
A sales channel can continue generating revenue while gradually weakening the company that relies on it. A marketplace can erode margins and commoditise pricing, a distributor can take control of the customer relationship, affiliate networks can degrade acquisition quality, and intermediaries can reduce access to first-party data. The problem begins when short-term profitability hides a deeper deterioration of the business model. Deciding whether to maintain, reduce or abandon a channel therefore requires looking beyond the revenue it generates and measuring what it really costs in margin, control, customer knowledge and brand coherence.
A profitable sales channel almost always benefits from a form of internal immunity. As long as it brings in revenue, supports commercial targets and contributes positively to results, the question of whether to keep it seems settled in advance. Why stop selling where customers are still buying?
The answer becomes less obvious when we stop looking only at the revenue generated and start examining the quality of that revenue. Not all income has the same strategic value. Some revenue strengthens the customer relationship, reinforces positioning and improves market knowledge. Other revenue can make the company more dependent on an intermediary, force it to lower prices, fragment its data and gradually shift more of the value created towards whoever controls the channel.
The paradox is therefore quite simple: a channel can remain profitable even when it has become strategically damaging.
A Channel’s Profitability Does Not Reveal Everything It Costs
The first mistake is to assume that a channel is healthy simply because its P&L remains positive. A marketplace can generate hundreds of thousands of euros in sales and still be profitable after commissions, logistics costs and advertising investment. A distributor can move significant volumes without requiring the same level of internal sales resources. An affiliate programme can produce conversions at what appears to be a reasonable cost.
These calculations are essential, but they mainly describe what is visible in the accounts. They capture indirect effects far less effectively. A company that generates an increasing share of its sales through an intermediary can gradually lose its ability to impose terms, understand customers or arbitrate its commercial strategy freely. The channel continues to perform, but its growing weight changes the balance of power.
This dependency often becomes visible late because its first effects are comfortable. Volumes increase, market access accelerates and certain functions are handled by the partner. The problem becomes more obvious when a commission increase, algorithm change, shift in commercial terms or loss of preferential placement is enough to destabilise revenue almost overnight.
Profitability therefore needs to be assessed alongside the company’s ability to preserve alternatives. The more indispensable a channel becomes, the more its apparent return should be compared with the potential cost of that dependence.
Some Channels Generate Revenue by Gradually Destroying Pricing Power
Pricing is one of the first places where revenue quality can deteriorate. On a marketplace or within certain distribution networks, customers immediately compare similar offers and competitive pressure naturally makes price much more visible than other dimensions of the value proposition.
For a brand, this mechanism can be effective when the goal is to move volume, accelerate distribution or gain visibility quickly. It becomes more problematic when the channel gradually teaches the market that the product should be bought on promotion, compared primarily on price or postponed until the next discount cycle. Revenue continues to exist, but increasingly under conditions that can make it harder to sell in other ways.
The danger becomes particularly significant when one channel represents enough volume to influence the rest of the market. Distributors ask for better terms, direct customers use prices seen elsewhere as a reference, and the brand may eventually lower prices on its own channels to avoid a gap that has become difficult to justify.
A company can then find itself in a strange position: the channel remains profitable in isolation, but it reduces the economic value of sales made everywhere else. This type of effect rarely appears in a simple channel performance dashboard, even though it can be decisive for commercial strategy and control over market positioning.
Losing the Customer Relationship Can Cost More Than a Commission
The second issue concerns access to the customer. When a sale passes through an intermediary, the company may gain operational simplicity while losing part of the commercial relationship. Depending on the channel, it may know only partially who the buyer is, how they reached the purchase, what motivated them or what makes them return.
This loss mattered less when the main objective was simply to multiply distribution points. It becomes much more costly in an environment where customer knowledge feeds marketing, product development, retention and personalisation. A company that sells a lot without knowing exactly who it sells to can become rich in transactions but poor in understanding.
The difference becomes especially visible over time. A direct channel generally makes it easier to work on repeat purchases, observe behaviour, question customers, test offers and develop a relationship that goes beyond the first transaction. An intermediary may perform some of these functions on behalf of the brand, but the data and relationship remain concentrated with that intermediary.
Revenue generated today can therefore reduce the ability to create tomorrow’s revenue. When a customer is acquired inside an environment the company does not control, the next transaction still depends on the same channel. By contrast, a direct relationship can turn an initially low-margin purchase into significant customer value over several years.
This does not mean intermediation is inherently bad. It simply means distinguishing the visible acquisition cost from the cost of giving up a proprietary customer relationship.
The Channel Can Eventually Change What the Brand Represents
A brand does not only choose where to sell. It also chooses the context in which its offer will be perceived, compared and purchased. That context gradually influences positioning.
A product designed to be valued for expertise, service or brand universe can lose part of that differentiation when sold in an environment organised mainly around price, availability or ratings. Conversely, some specialised distributors can strengthen positioning precisely because their selection brings credibility.
The issue therefore lies not in the nature of the channel itself, but in its coherence with strategy. A premium brand that becomes heavily dependent on promotions, a company that claims to offer a personalised relationship while outsourcing most of its sales to a platform, or a specialist player that becomes one reference among hundreds of near-identical products can all generate revenue while gradually weakening the reason customers were willing to pay more in the first place.
At that point, the channel is no longer merely distributing the offer. It is starting to redefine it.
Stopping a Profitable Channel Does Not Necessarily Mean Closing It Overnight
The hardest decision is not always recognising that a channel has become problematic, but deciding what to do about it. Immediately closing a profitable source of revenue can be just as dangerous as keeping it indefinitely. In many cases, the real issue is how to reduce dependence gradually.
A company can limit certain products to one channel, differentiate assortments, reserve specific offers or services for direct sales, rebuild proprietary acquisition capabilities or accept sacrificing part of the volume in order to restore margin and control. The transition can take time, especially when the channel accounts for a significant share of revenue.
The analysis should therefore go beyond conventional metrics. Margin must be considered alongside pressure on pricing, access to data, quality of customer relationships, dependence on the partner, effects on other channels and coherence with positioning. A channel that appears slightly less profitable may ultimately be far more valuable if it strengthens several of these dimensions.
The real question is therefore not whether a channel still makes money. It is whether that revenue increases the future value of the company or gradually forces it to surrender part of what made it strong.
Revenue remains essential, but its quality eventually matters just as much as its volume. A company can survive for a long time with a channel it does not control, customers it barely knows and prices it increasingly struggles to manage. It usually discovers the problem on the day that channel stops being quite so generous.
We support companies that want to rethink their commercial strategy, sales channels and level of dependence on intermediaries.
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Written by Julien Ricciarelli-Bonnal
10 September 2026
