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Which factors should drive the decision between direct and indirect channels?

Packaging color, seasonality, or employee age.

The company size alone.

Reach, control, cost, and service requirements.

Deciding between direct and indirect channels hinges on four guiding factors: reach, control, cost, and service requirements. Reach looks at how broadly you need to access customers; indirect channels can quickly expand geographic or segment reach through partners, while direct channels offer closer, more targeted access but require more internal capability to scale. Control refers to how much you want to shape pricing, branding, and the customer experience—direct channels provide greater control, whereas intermediaries can influence or dilute it. Cost considers the total investment and margins: direct selling often involves higher fixed and ongoing costs (sales teams, systems, training) but can yield higher margins, while indirect channels can reduce upfront investment and spread costs across partners, though margins may be thinner. Service requirements matter because products needing installation, customization, or ongoing support are often better served directly to ensure consistent service, whereas simpler products or those with robust partner capabilities can be effectively distributed indirectly. Other factors like packaging color, seasonality, or company size alone don’t address these trade-offs.

Regulatory environment only.

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