The Advantages and Hidden Costs of Being Both Manufacturer and Seller
July 28, 2026 · KârHesapla · Ferhat Demir · E-commerce Specialist
In the previous article we discussed how producing and selling require different skills. This article’s topic is different: what happens when, without giving up production, you add direct e-commerce sales alongside your existing wholesale/dealer channel? This model sounds like “the best of both worlds”, but it also brings the risk of competing with your own wholesale customers.
Advantage: diversified cash flow from two channels
Wholesale is usually a high-volume but low-margin, late-paying model. E-commerce, by contrast, is a low-volume but high-margin, fast-paying model. Running both channels at the same time reduces dependence on a single large customer or a single payment calendar. When a customer is lost on the wholesale side, e-commerce revenue can act as a buffer that prevents the business from coming to a complete stop.
Advantage: real demand data lands directly in your hands
A manufacturer that only sells wholesale learns secondhand from its dealers which of its products are really in demand among end users — and this information usually arrives late and incomplete. Direct sales show in real time which color, which size, which variant is really selling. This data also improves production planning: how much more or less of each product to produce is no longer based on guesswork but on real demand.
Risk: price conflict can anger your dealers
This is the biggest and most common risk. While your dealers sell by adding their own margin on top of the price they pay you, if you sell the same product directly at a lower price, the dealer feels you are taking their customers. This can lead to long-term wholesale relationships breaking down, and even the dealer dropping you as a supplier.
The solution is usually not price but product differentiation: selling only certain variants, limited collections or special products you don’t give to dealers through the direct channel prevents the two channels from colliding head-on. Trying to sell the same product at the same price in both channels almost always creates tension.
Risk: capacity is split across two fronts
Production capacity is fixed; dealer orders and direct sales orders compete on the same line. If both sides experience a surge in demand at the same time during a busy period (a campaign, the start of a season), deciding which orders to prioritize can put the business in a difficult position. The dealer is annoyed by late delivery, while the direct customer runs into an “out of stock” warning — both damage brand trust.
The way to reduce this risk is to set a separate, fixed capacity share for direct sales (for example 15-20% of total production). As long as this share is not exceeded, dealer orders never fall into second place.
Risk: two different accounting/tax setups
In wholesale, invoicing and VAT practice are usually uniform; when e-commerce is added, an extra accounting layer kicks in, including retail sales, e-invoice/e-archive obligations and commission deductions. Our e-invoice and e-archive guide, which covers this topic in detail, is a useful starting point for avoiding confusion when managing both channels together.
Pricing can’t follow the same logic in both channels
Wholesale pricing is usually done by adding a fixed profit percentage on top of the unit cost. E-commerce pricing, however, involves entirely different items such as commission, VAT calculated from within the price, and shipping. Trying to use the same pricing logic for both channels — for example simply adding a “retail profit share” on top of the wholesale price — underestimates marketplace costs and leads the direct channel to be less profitable than assumed. The break-even price needs to be calculated separately for each channel.
Who is this model right for, and who is it not?
For businesses whose production capacity is open to growth and whose dealer relationships are strong and tolerant of diversification, this model provides a real advantage. By contrast, for a manufacturer whose capacity is already limited or who depends heavily on a small number of large dealers, adding a direct channel may put the dealer relationship at risk while providing only a limited return. The decision depends on how flexible production capacity really is.
The risk is not the same size for a small manufacturer and a growing one
For a small manufacturer with limited capacity that depends on a single large dealer, opening a direct channel is high-risk — losing that single dealer relationship endangers the whole business. For a grown manufacturer with several dealers and a diversified customer base, however, offending one dealer affects only a small part of total revenue. That is why the decision to move into a direct channel should be made by looking at the degree of dealer dependency before looking at production capacity.
Checklist: before managing two channels at the same time
- Do you have a plan for a separate variant/collection for direct sales, distinct from dealer products?
- Have you decided in advance how much of your total capacity you will allocate to direct sales?
- Are you calculating pricing separately for the two channels, according to each one’s cost structure?
- Have you clarified your e-invoice/e-archive obligations with your accountant?
- Is there a written rule on which channel will be prioritized during busy periods?