Wholesale vs. Direct-to-Consumer: Key Differences (2026)

Compare wholesale vs. direct-to-consumer models, including pros, cons, and how brands can use both to grow sales and simplify operations.

Wholesaler retailers sell in bulk to retailers and intermediaries. Direct-to-consumer (DTC) brands sell directly to end customers through their own channels. These two sales models overlap in some areas, and differ in others.

DTC sales are showing no sign of slowing down, reaching $240 billion in 2025. The maturity of DTC ecommerce shows up in B2B as well, as a new generation of B2B buyers often expect the same consumer-style buying experiences when they buy wholesale. In fact, 61% prefer an overall rep-free buying experience, according to Gartner’s 2025 B2B buyer survey.

Brands like Tony's Chocolonely and Carrier are meeting the demand by adopting unified commerce strategies that serve both wholesale and individual buyers. 

This guide compares wholesale and DTC, then explains how to deliver personalized commerce experiences across both channels.

Wholesale vs. direct-to-consumer: What’s the difference?

Wholesale and direct-to-consumer sales differ by who buys the product, the size of the purchase, and often, how the sale happens. 

• Wholesale businesses sell products in bulk to retailers or distributors. The purchase is completed by a B2B buyer on behalf of the company buying the products.
• DTC businesses sell products to directly to individual customers.

How wholesale works

Wholesale businesses sell products to other companies in bulk at a lower per-unit cost than retail. The companies making the purchase generate revenue by reselling the products at a higher price.

The wholesale market represents a significant portion of US business activity. In February 2026, US retail wholesalers reported $751.9 billion in sales, up 8.8% from February 2025, according to the US Census Bureau’s Monthly Wholesale Trade Report.

How direct-to-consumer works

A direct-to-consumer business sells products directly to the end customer, usually through owned sales channels like an ecommerce website or brick-and-mortar store.

Gymshark is an example of a DTC company in the fitness industry. Customers can buy the brand’s apparel through the brand’s website, international pop-up shops, and in their brick-and-mortar store in London, each of which the brand operates themselves. 

Direct to consumer vs. wholesale at a glance

The table below breaks down the basic differences between wholesale and direct-to-consumer sales along several key parameters.

Feature	Wholesale	DTC
Orders	Large, infrequent bulk orders	Small, frequent, individual sales
Revenue	B2B accounts and distributors	Direct individual transactions
Pricing	Lower price per unit	Full retail price
Data ownership	Limited, retailer-owned	Deep, first-party
Logistics	Partner-assisted fulfillment	Brand-funded shipping and returns

Order size and order frequency

Wholesale retail involves larger, less frequent orders. It concentrates more revenue into fewer retail or distributor orders. B2B buyers place larger account-based purchases, replenishment orders, or orders tied to negotiated buying cycles.

Direct-to-consumer sales involve smaller purchases from individual customers. In DTC, brands earn individual purchases through channels such as their website, stores, marketplaces, email, social media, and paid ads. With the exception of replenishable products like cosmetics and skincare, DTC customers often purchase with a less reliable cadence, since they are not selling the products they receive in order to make a profit.

Margins and cost structure

Wholesale means selling at a lower price per unit. The lower per-unit margin still allows for a profit because customers buy many units at a time. t 

Direct-to-consumer sales come with a higher per-unit cost. Because end consumers generally purchase smaller numbers of units at a time, DTC retailers need higher margins in order for their businesses to remain profitable. DTC removes the wholesale intermediary, but the brand takes on more costs. The brand pays for customer acquisition, ecommerce operations, fulfillment, packaging, and customer support. 

DTC gives brands more control over pricing. Brands can capture more of the retail price, but that doesn’t guarantee better margins. In Nike’s fiscal 2024 fourth quarter, Nike Direct revenue was $5.1 billion, down 8%, while wholesale revenue was $7.1 billion, up 5%, according to Nike’s earnings report.

Customer relationship and data ownership

DTC gives brands a direct relationship with end consumers. When a customer buys through a brand’s website, store, app, or other owned channel, the brand can collect first-party data they can use to track browsing behavior, purchase history, preferences, retention, and lifetime value.

With wholesale, downstream retailers own more of the transaction-level relationship, which can limit what the wholesaler learns about the end customer.

Marketing, fulfillment, and returns

DTC gives brands more control over the end customer experience, and that control adds operational responsibility. Brands selling direct fund their own traffic, fulfillment, customer service, and returns process.

Wholesale doesn’t eliminate marketing or logistics, but it can shift part of the work to retail partners. Retail partners help with discovery, merchandising, in-store selling, delivery, and consumer returns. 

Pros and cons of direct-to-consumer

Operating a direct-to-consumer channel involves several trade-offs. Among other factors, increased brand autonomy comes with higher overhead costs.

Benefits

DTC made up 19% of total US retail ecommerce sales in 2025, according to a May 2025 EMARTKER forecast. Potential advantages of selling directly to consumers include:

• Greater control: DTC brands manage their own product testing and marketing materials, decisions that involve other stakeholders in B2B models.
• Brand connection: More than 55% of US consumers feel more connected to brands when shopping on their websites, according to a 2024 EMARKETER survey.
• Gen Z engagement: More than twice the proportion of adult Gen Z consumers (28%) report regularly purchasing DTC compared to older generations (13%), per March 2025 KPMG data, suggesting that DTC could be the way to reach younger customers.
• Access to customer feedback: Owned channels provide immediate insights into customer thoughts. Susana Saeliu, cofounder and CEO of Pluto says: “There’s no better way to get customers’ thoughts quickly than through our owned customer experience channels.” 
• Faster time to value: Direct contact with customers allows brands to validate new ideas before investing in full product development.

Jamie Gemmell, digital manager at LVI Thermosoft, says: “Direct interaction with customers allows us to better understand their needs, preferences, and feedback. This helps us develop new products and improve existing ones, leading to higher customer satisfaction and loyalty.” 

Drawbacks

The direct-to-consumer sales model has advantages, but there are drawbacks as well: 

• Operational vulnerability: Relying on a single ecommerce website creates a point of failure. If the site crashes, revenue stops. Brands with retail partners can still reach customers through physical stores during technical issues.
• Greater responsibility for customer acquisition: Selling DTC means you are solely responsible for making consumers aware of your product and getting them to make a purchase. You don’t have retailers and distributors showcasing your product and convincing customers to buy.

Ben Kuhl, CEO of Shelf Expression, adds: “It can be expensive to sell directly to consumers, since you’re responsible for more of the process. And depending on what you’re selling, you might not be able to reach as many people as you could if you used wholesalers.”

Pros and cons of wholesale

The wholesale model involves a set of trade-offs regarding distribution reach, order volume, and brand autonomy.

Benefits

Key advantages of selling wholesale include: 

• Wider reach: Wholesale customers have built-in audiences. Selling to a department store like Walmart allows you to reach their 280 million weekly shoppers. 
• Higher average order value (AOV): B2B buyers purchase products in bulk at a discounted price. This higher average order value improves cash flow. NuORDER’s 2025 report cites large orders as a key reason the channel helps them scale revenue.
• Reduced operating costs: When selling B2B, you only pay fulfillment costs for a single large order rather than individual items. The NuORDER report notes that wholesale can support lower customer acquisition costs (CAC) and reduced operational overhead.
• One point of contact: Susana from Pluto says: “Even though it can take some more time to build a brand by going purely wholesale from the beginning, it can also be less of a hassle in terms of dealing one-on-one with individual customers.” 
• Natural retention: Wholesale customers want consistency. If your products have a high sell-through rate in their own stores, B2B buyers will return to purchase again. NuORDER’s report describes wholesale’s strength as coming from predictable bulk orders, which makes the channel more stable than DTC. 
• More predictable revenue: B2B sales are often negotiated on an annual basis and transacted through purchase orders, meaning that the buyer expects (and has budgeted for) regular purchases from you. The steady business gives you a clearer view of your income and can help your financial planning and strategizing. 

Jay Allen, CEO of watch retailer Smith & Bradley, adds: “The wholesale channel requires work to sell into businesses and find new accounts. It’s a different shipping and financing model than DTC. But the revenues and profits are helping us to fund and grow the DTC side of the business. 

“Ultimately we are a DTC manufacturer, but adding the wholesale business gives us more exposure in the marketplace, more revenues, and more leverage with suppliers. We’re scaling because of this extra effort.” 

Drawbacks

The downsides of the wholesale business model include:

• Lower profits: Wholesalers sell products in bulk, but at a lower price. This means your profit margin is lower on each product compared to selling DTC. Food wholesalers, for example, see an average net margin of 1.1%, according to January 2026 data from NYU. 
• Less control: Wholesale customers have control over how they sell your products. If retailers discount below your recommended retail price (RRP), they can draw customers away from your brand site where margins are highest.
• More relationship building: In a 2025 B2B buyer report, 76% of buyers said more than three people are involved in the decision-making process, while 22% said six to 10 people are involved. You need a team to guide buyers through this process and maintain the relationship after the sale.

Wholesale vs. direct-to-consumer: Which model is right for your business?

Wholesale and direct-to-consumer are different business models. Each has benefits and challenges. Consider these four factors when choosing a model or evaluating both.

Demand for personalization

Personalizing products in bulk is difficult when selling wholesale. Business customers purchase off-the-shelf inventory in bulk and rarely have customization options for their own customers.

If you sell products with high levels of customization, or if personalization is your unique selling proposition (USP), DTC is a common choice.

Michael Heckert, owner of OurCoordinates, says: “We specialize in made-to-order, engraved jewelry. Due to our items being highly personalized and unique, the DTC business model was, in our eyes, the best route to take the business.” 

The same principle can be applied to marketing. If your sales benefit from marketing to end consumers based on their specific customer profiles, direct-consumer-sales make that type of outreach possible.

Industry

Specific regulations bind some industries like healthcare and alcohol, which creates challenges for selling directly to customers. Online platforms like Google and Meta often restrict advertising for regulated products. 

A hybrid model reduces some of this risk by combining ecommerce with practitioner, retailer, or wholesale relationships. For example, health supplement retailer Metagenics used Shopify to add DTC while preserving their B2B relationships with healthcare practitioners and retailers.

With Shopify, they carried out prescription-based ordering, customer segmentation, and flexible B2B pricing. Metagenics saw a 67% increase in year-over-year ecommerce revenue and 25% higher conversion. Their DTC revenue reached three times the initial forecast.

Customer education

Wholesale customers often choose products that require minimal sales effort. If you sell DTC and invest in customer education, you can reach consumers who need to see a product demonstration. This can make DTC a good option for categories where customers might need more specifics about what makes your product a better choice than close competitors.

“We initially started doing wholesale with our luxury pergola product through a dealer network,” says Stacy Elmore, cofounder of The Luxury Pergola. “We moved to DTC and found our market for customers increased dramatically. The DTC provides access to more consumers and offers better cash flow for our business.”

The brand now sells almost exclusively DTC. Stacy continues: “The biggest difference that caused us to shift is that our product is relatively innovative for the outdoor space. It makes more sense for us to show the benefits directly to customers, rather than trying to convince dealers or contractors of the benefits and rely on their marketing efforts.” 

Available capital and operating complexity

Choose DTC if your company has capital to fund marketing, ecommerce, fulfillment, returns, customer service, retail operations, and software. The upside is more control and higher margin potential, but that doesn’t mean it’s automatically more profitable. 

Levi Strauss reports their DTC sales carry higher gross margins than third-party sales, but also higher selling expenses and slightly lower profitability. In 2025, the Levi Strauss DTC channel reached 49% of total net revenue.

Choose wholesale if you want to sell your products without building a consumer-facing operation. 

Apparel brand On Holding disclosed in 2025 financial results that wholesale was their higher-revenue channel, with 58.2% of net sales. However, they also referred to being “adversely affected by the financial health of [their] wholesale partners,” highlighting another consideration: if you rely on a smaller number of big retail customers for your revenue, any one of those companies going under can impact your bottom line. 

Best practices for selling wholesale and DTC

Retailers sell wholesale and direct-to-consumer to reach different markets. They may use DTC channels to test new products, and wholesale orders to secure up-front payment for bulk inventory. 

Although managing both channels involves operational risks, specific strategies help balance these operations.

1. Define your direct-to-consumer strategy

Selling direct-to-consumer creates new relationships with customers. As brands build direct customer relationships and collect customer data, they sell through channels that do not involve existing retail partners.

Define your DTC strategy to anticipate potential channel conflict, or the cannibalization of retail sales. The goal is to identify and address potential conflicts before they affect the customer experience.

Magic Spoon, a high-protein cereal brand, uses their DTC channel to drive repeat purchases from consumers who want to save by ordering direct and skipping intermediaries, and drives more growth (and reaches additional customers) through wholesale retail. Customers shopping directly on the brand’s website can build bundles and subscribe to recurring deliveries. Magic Spoon also uses Shopify to support their ecommerce growth, which helped increase subscriptions by 29%. 

The company’s site also supports their retail partners rather than competing with them outright. Their store locator helps customers find Magic Spoon products nearby. The brand is available through retailers including Target, 7-11, Whole Foods, and Smart & Final. 

Jay from Smith & Bradley says, “The biggest issue tends to be around DTC promotions when you have inventory in the wholesale channel. We agree with our wholesale partners on promotional dates: neither of us can break prices outside of set times during the year. 

“This prevents us from undercutting our wholesale customers as well as the reverse, [and] puts pressure on the DTC channel to perform well without heavy discounts.” 

2. Partner on fulfillment

If you’re a wholesaler experimenting with DTC, or don’t want to take on the additional work of fulfilling orders on your own, partnering with retailers to fulfill orders is a win-win scenario.

Rob Weatherhead, founder of Affordable Wines, says, “Our industry has gone through a lot of supply issues, so we had to be sure we were through them and had a supply chain that could service larger orders.”

Similarly, consider offering a buy online, pick up in-store (BOPIS) option as part of your online DTC strategy. Whether you fulfill orders yourself or outsource them to retailers, this gives consumers additional options and can increase in-store foot traffic. Consider working with retail partners to build a dedicated online order pickup area, or possibly a store within a store to deliver a branded experience.

You could even ask retail partners if they have dark stores, or facilities at the outskirts of large metro areas that are closed to the public and dedicated specifically to fulfilling DTC orders.

The decision to partner on logistics is one of several “buy or build” choices you can make when adding DTC to your sales channels. 

3. Increase partner sales using data

The customer data you collect from selling direct-to-consumer can be used to help wholesale partners improve their sales. As a brand with a direct relationship with the customer across channels, you’ll have path-to-purchase insight that retail partners can use to better market your product and sell more, which helps you both.

Immerse yourself with your early DTC adopters to learn what motivates them, and how to construct incentives that increase sales.

That’s how fitness equipment brand Fit for Life has strengthened their relationship with retail partners since going DTC. Each quarter, Fit for Life audits their brick-and-mortar retailers, hands out report cards, and offers training sessions aimed at helping partners optimize their ecommerce channels. 

For example, they recommend retail partners:

• Ensure each product has variant SKUs, rather than separate SKUs, so its sales history and product reviews are attached
• Ensure each attribute is placed in the right category—all yoga mats are included in the yoga mat category rather than fitness mat category—to improve the customer search experience

“They are begging us for data,” says Katrina High, Fit for Life’s merchandising director. “We take what we’ve learned and offer it to our partners. This is obviously good for us, but it also helps them make incremental sales.”

Shopify’s unified commerce approach goes a step further, by automatically syncing data across both B2B and DTC sales channels. Retailers get real-time insights into your top-selling SKUs and can adjust inventory accordingly, ultimately driving better margins and stronger partnerships.

4. Improve the B2B buying experience

DTC success hinges on continuously optimizing the customer experience. Don’t forget about doing the same for B2B buyers. Shopify’s unified data model helps streamline those efforts by consolidating customer, product, and order data into one platform, giving brands a real-time view of their entire business as they sell across B2B and DTC channels.

Use Shopify’s ecommerce automation functionality to assess where a wholesaler is in the buying process and deliver targeted marketing campaigns that convince them to buy. 

If a B2B customer completed your wholesale application form and said they’re looking for inventory with a high sell-through rate, for example, automatically email a report that shares your highest-performing SKUs. A selection of testimonials and handy tips to resell the products could seal the deal.

Michael Martocci, founder of SwagUp, says, “We now have customers willing to place more than $50,000 orders online on their own, with minimal to no hand-holding by reps. If you can get large B2B AOVs with low sales overhead, you can build a pretty profitable business.” 

Laird Superfood, a DTC brand that sells plant-based coffee creamers DTC and wholesale, improved the buying experience for their B2B customers. The company reports month-over-month sales increases of 15%. B2B accounted for about a quarter of overall sales prior to improving the buying experience, and Laird expects that figure to top 75% within two years.

“Being able to automate the process changes how we build our team,” says Luan Pham, Laird’s marketing chief. “It prevents us from missing 2 a.m. orders and keeps our customers from having to wait to place an order until we’re in the office. It just solves so many problems.”

5. Find an ecommerce platform to handle B2B and DTC transactions

The online shopping needs for DTC and wholesale customers are increasingly similar. With Shopify, you can sell to both customer groups from the same store. Shopify’s unified data model ensures product info, inventory counts, and customer profiles remain in sync, so your wholesale buyers and DTC shoppers both get an optimal experience, no matter how or where they shop.

Colin Barceloux, CEO of Lively Root, says, “One of the biggest priorities for us was to make sure both parts of the business—D2C and B2B—felt unified. Same brand, same website, same quality, and, most importantly, same service. 

“The biggest mistake I think companies make is trying to separate the two. The more a company can integrate both types of offerings, the better off they will be in the long term!”

Use Shopify’s robust B2B ecommerce platform to gate wholesale prices behind a password-protected portal on your main DTC website. 

Wholesale customers can visit your DTC website and sign in to:

• See wholesale and manufacturer’s standard retail price (MSRP)
• View contracted payment terms 
• Get reminders of when their invoice is due 
• Invite stakeholders to view previous orders 
• Customize shipping addresses (if they have multiple locations)
• Self-serve wholesale orders

Brian Hawkins, CEO and founder of Ghost Bed, says, “Omnichannel is where the sales are to build a brand. Shopify is the platform to be able to do that without losing any sleep at night and to know everything is running smoothly.” 

Why a hybrid model can work in 2026

The question isn’t always whether to sell wholesale versus direct-to-consumer; today, the real question might be how to do both most effectively. The hybrid model, selling both wholesale and DTC, combines the benefits of larger-volume B2B orders with the valuable data you acquire from direct customer relationships on your DTC channel. And the hybrid model is more practical than ever because B2B buying looks more and more like consumer ecommerce. 

In Contentful’s 2025 “B2B Buyer Benchmark Report”, 84% of B2B buyers said self-service tools are critical when choosing a vendor. Real-time pricing and inventory access are baseline expectations. DHL’s 2025 “B2B Ecommerce Trends” report found that business buyers expect the speed and convenience they experience as consumers.

Shopify B2B has tools for self-serve buying and custom catalogs. It syncs products and inventory across channels, and lets brands serve different audiences without fragmenting operations.

DTC vs. wholesale FAQ

What is the difference between direct-to-consumer and traditional retail?

Direct-to-consumer (DTC) means selling your products to the end consumer. If you’re partnering with retailers, however, you sell products in bulk directly to the wholesaler, who then goes on to sell individual products to their own customer base.

What is considered direct-to-consumer?

Direct-to-consumer is any type of business that happens when the consumer purchases products directly from the brand or manufacturer. Nike’s DTC business accounted for just 15% of its revenue in 2010. Fast forward to 2024 and that figure jumped to 43%.

Is DTC cheaper?

It’s often cheaper to buy products directly from a brand, rather than its retail partners. This is because DTC brands have higher margins and can afford a small discount or incentive to acquire new customers.

Is DTC more profitable than wholesale?

If selling the same volume of inventory, DTC is more profitable than wholesale because you get the full price for each product sale. Wholesale customers, on the other hand, buy products in bulk at a lower cost per unit.