Retail channels for Amazon brands
Both routes put your product in another country. They are otherwise almost nothing alike. Running the marketplace yourself keeps the retail margin and the customer, and hands you the tax registration, the compliance obligation and the local advertising bill. Selling to a distributor hands all of that to someone else and cuts your revenue per unit roughly in half.
The useful way to decide is not which one is better in general, but which one your particular product, margin and appetite for administration can support. Most brands that do well internationally end up doing both, in a sequence.
The two routes in plain terms
Running the marketplace yourself means you register for tax in that country, ship inventory into the local fulfilment network, list in the local language, set local prices, run local advertising and answer local customer service. You are the seller of record. Every unit earns you the full retail price less marketplace fees.
Selling to a distributor means you ship pallets to one buyer in that country at an export price. They import, clear, store, sell to local retailers and handle the local obligations. You are the supplier. Every unit earns you an export price that leaves room for two more margins below you.
The first is a retail operation in a country you do not live in. The second is a wholesale relationship with one customer. Those are different businesses, and the question is which one you want to be running.
The comparison, line by line
| Marketplace yourself | Local distributor | |
|---|---|---|
| Revenue per unit | Full retail less fees | Export price, roughly a third of retail |
| Who handles tax registration | You | Them, for their sales |
| Who is the legal importer | You | Them |
| Advertising cost | Yours, in local currency | Theirs |
| Time to first sale | Weeks | Months |
| Access to physical stores | None | The whole point |
| Control over price | Complete | Limited to what the agreement says |
| Inventory risk | Yours, sitting abroad | Theirs, once invoiced |
Read that table twice. The first column is better on margin and worse on almost everything else. The second column is worse on margin and removes every operational problem you cannot easily solve from another continent.
Where the marketplace route quietly costs money
Sellers underestimate this route because the setup looks like a checkbox. The real costs show up later.
Tax registration in the destination country is an ongoing filing obligation, not a one-off. Someone has to file, on time, in that jurisdiction, and mistakes accumulate interest. Compliance obligations attach to whoever places the product on the market, which is you: labelling, recycling and packaging schemes, product safety documentation, and in some regions a requirement to have a named responsible entity physically located there.
Then there is demand. A listing in a new marketplace has no reviews, no rank and no brand recognition, so it needs advertising to move at all, at local rates, in a language you probably do not write. Many brands discover their second marketplace costs more per unit in advertising than their first ever did, because they are launching from zero into an established field.
And inventory sitting in a foreign fulfilment network is capital you cannot easily recall. If it does not sell, removing or disposing of it costs money in a currency you do not hold.
None of this makes the route wrong. It makes the route a real project rather than a setting.
Where the distributor route quietly costs margin
The distributor route's costs are simpler and harsher: you sell at roughly a third of retail rather than receiving all of it, and you lose direct contact with the end customer.
Losing the customer matters more than brands expect. You no longer see the search terms, the reviews, the repeat purchase behaviour or the reasons for returns in that market. Your understanding of how the product performs there comes filtered through a partner whose incentive is to report good news.
You also inherit their priorities. A distributor carrying forty lines will push the ones that sell fastest and the ones with the best margin, which may not be yours. A brand that is a rounding error in a distributor's catalogue gets rounding-error attention, which is why the qualification questions in amazon seller international retail are worth asking before the price conversation.
The sequence that usually works
For most brands, the answer is not either-or but an order of operations.
Open the marketplace first, in one country, with a small inventory commitment. It is reversible, it is fast, and it produces the one thing you cannot buy: evidence that consumers in that country want this product at that price. Unit velocity, review sentiment and search term data from three months of local selling is exactly the material that turns a distributor pitch from a hope into a case.
Then approach distributors with that evidence. The conversation changes completely. You are not asking them to believe in an American product; you are showing them what it does in their market already and asking them to take it into the stores you cannot reach.
Then decide how the two coexist. Usually the marketplace stays yours and the physical retail goes to the distributor, which requires the exclusivity grant to be written carefully so you have not accidentally signed away your own listing.
Reading your own numbers to choose
Three tests, in order.
Margin test. Can you sell at roughly a third of local retail and still make money after production and freight? If the answer is no, the distributor route is closed regardless of preference, and the marketplace route is your only option. If the answer is comfortably yes, the distributor route is open.
Product test. Does the product need to be touched, demonstrated, smelled or fitted? If yes, physical retail is where its sales live and the distributor route is worth the margin. If it sells fine from a photograph and a review, the marketplace route captures most of the available demand by itself.
Capacity test. Do you have someone who can own tax filings, compliance documentation and local advertising in another jurisdiction? Not in theory, but as a named person with hours. If not, the distributor route is not a compromise, it is the realistic option.
A brand failing the capacity test but insisting on the marketplace route usually ends up with a dormant listing, foreign stock it cannot recall, and a filing obligation it forgot about.
What each route does to your domestic business
The marketplace route mostly leaves your home listings alone, apart from splitting inventory and attention. The one thing to watch is price gaps: a large difference between your price in two marketplaces invites cross-border arbitrage, which eventually shows up as unexpected stock on your home listing.
The distributor route introduces a genuine diversion risk, because you have now created a supply of your product at an export price that is low relative to your home retail. Territory clauses, lot coding by market and a willingness to enforce are what keep it contained. The mechanics are in amazon anti diversion.
Both routes improve the durability of the business in the way that matters for valuation. A brand selling in three countries through a mix of marketplaces and distributors is a much harder thing to disrupt than a brand whose revenue is one listing in one country, which is the argument made in diversify beyond amazon.
Making the first move
If you are choosing today, the low-risk version is this. Pick the single country where your existing data already shows demand. Open the marketplace there with a deliberately small inventory commitment, priced to cover local costs rather than to win share. Run it for a quarter and read what it tells you.
Then take that evidence to two or three distributors in that country who already serve the retailers you want, and negotiate a first order against a one-year, volume-conditional territory grant that excludes the marketplace you just opened.
If you would rather start by seeing which distributors and retail buyer types plausibly stock products like yours, paste your Amazon listing into WholesalePilot and the preview maps the product to the buyers that already carry its category.
Questions sellers ask about the two routes
Can I do both in the same country? Yes, with the exclusivity clause written to separate marketplace from physical retail. Doing it without that clause is how brands end up in a dispute.
Which route is faster to revenue? The marketplace, by months. A distributor relationship involves samples, registration, label changes and a purchase decision.
Does a distributor want a brand that already sells on the local marketplace? Mostly yes, because it proves demand. A few will object to the price visibility, which is a pricing policy conversation rather than a reason to withdraw.
What if I pick the wrong country? The marketplace route is recoverable in a quarter. A three-year exclusive distribution agreement in the wrong country is not, which is the strongest argument for testing first.