For many emerging CPG brands, seeing your product on a retail shelf is a dream milestone—the moment when your business feels "real." But landing that coveted shelf space isn’t as simple as shipping a few cases and calling it a day. Moving from direct-to-consumer to retail distribution is a major leap that requires careful planning, financial precision, and a willingness to tackle new challenges head-on.
Let’s break down the process, why it’s so tricky, and how having the right operational tools in place—like Settle—can make all the difference.
Why Retail Expansion Isn’t Just “More Sales”
It’s tempting to think that selling in stores is just another sales channel, like adding wholesale to your Shopify site. But in reality, retail distribution introduces a whole new layer of complexity.
First, you have to be ready to scale.
Before approaching a retailer, you need to ensure you can reliably fulfill both your online customers and wholesale orders. Running out of stock—or worse, leaving a retailer’s shelves empty—is a fast way to lose trust.
Second, your margins need to make sense.
Wholesale typically means cutting your price by 40-50% to leave room for the retailer’s markup. If your COGS (cost of goods sold) are already tight, taking a wholesale discount can quickly turn an exciting partnership into a financial burden.
Third, you need operational visibility across channels.
Once you're selling through multiple avenues—your website, retail locations, marketplaces—you have to track which channels are performing, how much inventory is needed where, and what the true landed cost of getting a product to each shelf is. Without clear data, it’s easy for profitability to slip away unnoticed.
Retail expansion isn't just about growing—it’s about growing smart.
The Biggest Hurdles When Expanding Distribution Channels
When founders think about getting into retail, they often focus on the front-end work: perfecting the pitch, crafting beautiful sell sheets, and networking with buyers. And while that’s critical, much of the real challenge lies behind the scenes:
1. Production Readiness
Can your manufacturing partners scale up quickly if a retailer places a big order? Are your supply chains reliable enough to keep up with larger demand spikes?
Without a strong handle on production timelines and costs, scaling can go from exciting to overwhelming overnight.
2. COGS and Pricing Complexity
Every new sales channel introduces new costs—freight, storage, discounts, chargebacks—and they all eat into margins. Knowing your real COGS (including hidden costs like shipping and retailer fees) is crucial to setting sustainable pricing for wholesale.
This is where Settle comes in—by helping brands deeply understand their unit economics across different sales channels, founders can spot and correct margin leaks before they become serious issues.
3. Inventory Management
Inventory is the lifeblood of retail. Too little, and you risk out-of-stocks that hurt relationships with stores. Too much, and you’re sitting on cash you can't reinvest.
Tools like Settle’s inventory management integrations make it easier to forecast needs across DTC, retail, and wholesale channels, keeping your working capital flowing where it should be.
4. Cash Flow Gaps
Most retailers operate on delayed payment terms—net 30, 60, or even 90 days after delivery. That means you could be floating months' worth of production costs before you see a single dollar back.
With Settle, brands can access financing options that bridge these cash flow gaps, so you can say “yes” to big opportunities without draining your reserves.
5. Channel Tracking and Profitability Analysis
Not every retail channel is a slam dunk. Some stores might generate high sales but slim profits. Others could surprise you with strong margin performance.
Settle’s financial tools help founders track profitability by channel, so you can double down where it counts—and pivot away from underperforming relationships.
Why Strategic Retail Expansion Matters
Expanding into retail isn’t about growth for growth’s sake. It’s about building brand awareness, reaching new customers, and creating stability beyond a single sales channel. But without tight operational control, it’s easy to burn out your team, your finances, or both.
Founders who succeed at retail expansion are the ones who invest early in operational excellence—tracking every cost, projecting inventory needs, and protecting their cash flow like a hawk. With that foundation in place, you can grow with confidence rather than chaos.
Your Chance to Get a Taste of Retail: Enter the Pop Up Grocer Shelf Giveaway!
🚨 Calling all CPG founders 🚨
Ready to see your brand on an iconic retail shelf—with none of the upfront hurdles? We’ve partnered with Pop Up Grocer to give one lucky brand three months of retail space at their landmark NYC location: 205 Bleecker St, West Village.
This isn’t just shelf space—it’s your chance to get discovered by shoppers, buyers, and the tastemakers who shape what's next in the industry.
Here’s what’s included:
- 🛒 Three months of shelf space (up to 3 SKUs)
- 📣 A feature on Pop Up Grocer’s Instagram + 35K-subscriber newsletter
- 📖 A spot in their exclusive Brand Directory
- 👋 Product sampling directly with shoppers
Deadline to enter: May 15.
Whether you’re preparing to scale into broader retail or just getting your first taste of the shelf life, this is your chance to get noticed—without the usual barriers.
👉 Enter the Shelf Giveaway here!
Your retail journey could start with just one great opportunity. Why not make it this one?
