E-commerce, Creator & Digital Businesses · Buyer guide
Buying a Wholesale + DTC Omnichannel Brand business
Published · Reviewed by The Diligence Standard Team · Updated
Wholesale can diversify DTC acquisition risk, but retailer concentration, payment terms, chargebacks, markdown allowances and inventory commitments can create a very different cash profile from Shopify revenue.
How the business works
An omnichannel brand combines wholesale account economics, DTC acquisition and inventory. Value depends on channel margin, retailer concentration, sell-through, returns/allowances, working capital and brand demand.
Risks to test
- Retailer concentration
- Wholesale deductions/chargebacks
- Inventory commitments
- Channel conflict/pricing
- DTC paid-media dependence
- Long receivable terms
- Founder key-account relationships
Evidence to request and reconcile
- Channel P&Ls
- Retailer/customer revenue
- AR/deductions
- Sell-through data
- DTC cohorts
- Inventory aging
- Wholesale POs/backlog
- Brand/IP files
Decision questions
- Which channel actually creates cash profit?
- How concentrated are wholesale accounts?
- What deductions and returns reduce invoice revenue?
- How much inventory supports future POs?
- What is retailer sell-through?
- Can key accounts transfer?
- How dependent is DTC on ads?
- Are channel prices sustainable?