From Discrete Channels to Omnichannel Integration

As e-commerce has matured, the center of gravity has shifted toward marketplaces. While direct to consumer (DTC) still can offer a cost-effective and brand-forward growth model for some brands, today’s digital landscape for many brands is increasingly dominated by platforms such as Amazon, Walmart and Wayfair — where consumers begin and often end their shopping journeys. Marketplaces now account for the majority of online sales in many categories, providing scale, immediacy and embedded trust mechanisms that DTC alone can’t easily replicate. Meanwhile, the economics of DTC have become more challenging for many brands. Rising customer acquisition costs, increasingly complex fulfillment requirements and shifting consumer expectations have narrowed the margin advantages DTC once held.

Winning in e-commerce today requires a more strategic omnichannel approach — one that integrates the strengths of marketplaces, brand-owned channels and third-party (3P) retail platforms. Navigating this environment requires alignment across pricing, messaging, fulfillment and organizational design. It starts by defining the right role for marketplaces within your broader commercial strategy and then by optimizing the model by which you participate. As the role of marketplaces continues to grow in almost every brand’s sale, there are newer and more effective ways for many to ensure their investments are right-sized to the opportunity and that they maximize the opportunity marketplaces present (see Figure 1).

Figure 1. Gross Merchandise Sales by E-Commerce Channel (Excluding Restaurants and Auto Sales) (2018-2024F)

The Continued Rise of Marketplace E-Commerce

Online marketplaces now represent the most scalable lever for consumer reach. Platforms such as Amazon and Walmart offer massive built-in audiences and end-to-end infrastructure, enabling brands to achieve national or global distribution with relatively low upfront investment. Their appeal lies in immediate reach, turnkey fulfillment and customer service, low fixed costs, and real-time performance data to guide decisions. But these advantages come with meaningful trade-offs. Brands face margin pressure from platform fees and rising ad costs, limited control over content and positioning, restricted access to customer data, potential channel conflict, and the operational complexity of managing performance at scale. The brands that win treat marketplaces not as passive sales channels, but as performance marketing platforms – requiring clear strategy, disciplined KPIs, and continuous optimization aligned with broader commercial goals.

Their Value Proposition

• Instant reach and demand aggregation
• Turnkey fulfillment, returns, and customer service
• Rapid market entry without heavy fixed costs
• Real-time performance data to inform decisions

These Advantages Come With Important Trade-Offs

• Margin pressure from fees, discounts, and rising ad spend
• Limited brand control, especially on product positioning and content
• Opaque customer data, which hinders retention strategies
• Channel conflict with DTC and retail partners
• Executional intensity, requiring deep expertise to drive performance

The Strategic Role of E-Commerce Service Providers

Given the growing complexity of operating and winning across one or multiple marketplaces, many brands are turning to e-commerce service providers that bring specialized capabilities across content, media, logistics and data to support growth in the channel, streamline operations and improve margins. These partners fall into three primary archetypes, with each supporting brands in a different way across the marketplace chain of activities:

• Full-service wholesale partners: Own inventory and fully manage sales, content and fulfillment — ideal for brands seeking simplicity and scale without building internal infrastructure
• Managed service partners: Act as outsourced teams handling listings, ads and analytics — best for brands with product ownership but needing executional depth
• Tech-enabled self-services: Provide software to automate and optimize across marketplaces — well suited for digitally advanced organizations

Choosing the right partner, or set of partners, isn’t a procurement exercise — it’s a strategic decision that should align to your margin targets, marketplace maturity and growth priorities.

Choosing the Right Amazon Model: A Strategic Imperative

For most brands, Amazon is both the biggest opportunity and the most complex challenge among today’s leading marketplaces. Whether selling as a first-party (1P) vendor, a 3P seller or through an enabler-led 3P model, each structure offers different levels of control, scalability and risk.

• 1P (wholesale to Amazon): Simple to operate but offers limited control and thinner margins
• 3P (seller central): Higher upside and control but requires operational sophistication
• 3P with enabler partner: Offers executional leverage, though success depends on alignment, capability and incentive structure

None is inherently “better,” and each has a role depending on your category, brand strength and strategic priorities. The key is understanding what trade-offs you’re making and ensuring your model supports, not constrains, your long-term growth.

More important than structural choice is execution. Outperformance comes from bending the traffic and conversion curve: mastering search, deploying high-return advertising and building product velocity. Each model provides different tools to do this effectively, while full-service providers and some managed service providers are better incentivized to drive top- and bottom-line growth.

Financial Implications: The Bottom Line

Choosing the right model requires a clear-eyed view of financial trade-offs. 3P models can drive higher contribution but often require greater investment in internal capabilities. Enabler-led 3P models are offering some brands an opportunity to strike a balance, but results vary based on partner capability and alignment. This is where margin is made or lost. Success is not just about the model — it’s about execution within that model powered by the right talent and systems.

The comparisons that follow should inform, but not determine, your path. They provide a directional view of the unit economics with a key variable not included — the volume that each model can ultimately achieve. This, along with strategic fit, operational feasibility and market conditions, must shape the final answer for your brand (see Figure 2).

Figure 2. Trade-offs to Consider for Amazon Model Selection

Source: L.E.K. research and analysis, © 2025 L.E.K. Consulting LLC

Making the Right E-Commerce Decisions Starts at the Strategic Level

E-commerce success is no longer about picking channels — it’s about architecting the right go-to-market system. For CEOs and leadership teams, this means answering questions that are as structural as they are commercial:

• How do we manage our portfolio and assortment across channels to drive volume without cannibalization?
• What pricing architecture supports both margin and channel harmony?
• How should we organize our internal teams — and what should we outsource?
• What capabilities must we build versus borrow to execute effectively across marketplaces?

*This piece was co-authored alongside L.E.K. Consulting.