Why growing premium brands lose control of their distribution

What every UK premium brand needs to understand about distribution, margin, and competition law.

If you are growing a premium brand in the UK, you may have come across problems such as your products appearing on Amazon even though you did not authorise it, inconsistent pricing across channels, wholesale or trade partners discounting, or your Direct-to-Consumer (D2C) channel being more difficult to scale than expected.

In many cases, you are already doing a lot right. You may be selling D2C at full RRP; operating your own Amazon store and trying to maintain a consistent brand position. And yet, products still appear via third-party sellers, often at lower prices.

At some point, most brands assume this is a pricing problem or an Amazon problem. In reality, it is almost always something else: a distribution problem.

The real issue: distribution leakage

As your brand grows, you typically expand across multiple channels:

• Wholesale (for reach and volume)
• D2C (for margin and brand control)
• Marketplaces (whether planned or not)

Individually, each channel makes sense.

But together, they often create a system where wholesale partners are incentivised to maximise volume, products leak into unintended channels, pricing becomes inconsistent, and your own D2C channel is undercut.

In other words, your channels start working against each other. This is also called “distribution leakage” and without the right controls in place, it can be very hard to contain.

For premium brands in particular, this is critical. Uncontrolled distribution does not just affect pricing, it quickly undermines brand positioning and perceived value.

Why uncontrolled distribution (and leakage) matter

At first glance, this may look like a nuisance.

In practice, uncontrolled distribution has a direct and often significant, compounding impact, including:

• Margin erosion: discounting in one channel quickly spreads. Even small price differences can erode profitability across your entire network.
• D2C growth is constrained: if customers can find your products cheaper elsewhere, your D2C channel becomes less effective, no matter how much you invest in marketing.
• Brand positioning is diluted: for premium brands, inconsistent pricing and uncontrolled resale can weaken perceived value and long-term positioning.
• Loss of control: perhaps most importantly, you lose control over how your product is sold, presented, and experienced.

Eventually, you therefore do not only have a channel and distribution issue, but a growth constraint issue.

The competition law trap: trying to control price

A common reaction is to ask distributors not to discount, request that products are not resold, and try to maintain pricing consistency across channels.

The difficulty is that this is rarely enforceable and can create high legal risks (fines, damages claims, and other consequences) and is not necessarily the right lever.

Under both UK and EU competition law (the latter bites whenever you sell to Europe), brands cannot:

• fix resale prices
• require minimum resale prices
• pressure partners to maintain pricing

This is known as resale price maintenance (RPM) and is actively enforced especially, but not only, in the UK.

A more effective approach is not to control price directly, but to control distribution.

The fix: structure your distribution compliant with competition law

The good news is that UK and EU competition law do allow brands to structure their distribution systems in a way that restores control, provided this is done carefully.

Many successful brands move towards a more structured approach, often referred to as selective distribution (which basically means focusing on controlling who can sell and where, rather than trying to control resale price).

In simple terms, this amounts to the following:

• only approved partners can sell your products
• those partners must meet defined criteria
• resale is limited to authorised channels

When done properly, this approach can reduce leakage and unauthorised listings and help stabilise pricing without straying into resale price maintenance.

What this looks like in practice

A well-designed structure typically includes:

• Clear partner roles: for example, wholesalers supply only approved sellers, certain partners serve specific segments (e.g. practitioner market), and trade and retail roles are clearly defined.
• Authorised seller framework: you define who can sell your products, where they can sell them (e.g. own website vs marketplaces), and how your brand is presented.
• Onward supply controls: you limit resale to unauthorised traders, diversion into grey or secondary markets.
• Marketplace strategy: you decide whether marketplaces form part of your strategy, and who, if anyone, is permitted to sell there.
• Commercially workable agreements and consequences: you don’t rely on emails and goodwill, but set clear “rules” in contracts, backed by traceability and a clear escalation process, so you can act when needed.

When your distribution strategy and agreements are structured correctly, this approach can:

• significantly reduce leakage
• stabilise pricing (without fixing it)
• support D2C growth
• improve partner discipline
• strengthen your ability to act against non-compliant sellers,

all while remaining aligned with UK (and EU) competition law. More importantly, it turns distribution from a reactive “firefighting” exercise into a scalable, controlled system so that as you grow, your channels and partner network support your brand positioning instead of undermining it.

When should you act?

The right time is usually when:

• you are scaling D2C
• you are expanding internationally
• you are seeing pricing inconsistencies
• your products are appearing in unintended channels

In other words, when growth begins to outpace your distribution structure.

Takeaways

Many brands focus heavily on product, marketing, and growth and trying to “police price”, and only later realise that their distribution structure is what determines whether growth is sustainable.

Fixing and optimising your distribution requires moving from informal relationships and reactive decisions to a structured, commercially aligned and competition law-compliant distribution model with clear channel roles, an authorised seller approach, and contract-backed rules that work in practice.

Because ultimately, the brands that succeed are not just those with the best products, but those that retain control over how those products reach the market and protect the customer experience.

If you have questions or concerns about the distribution of your products, please contact Alexandra von Westernhagen or Carolyn Bane.