How One Mid-Sized Brand is Navigating Rising Costs and Finding New Growth
Consumer product brands importing from China are getting squeezed—hard. With tariffs climbing to 45% and retailers rejecting price hikes, the old model of “import, markup, and sell” is no longer sustainable.
Let’s look at how one realistic $30M brand—with its own warehouse, multichannel sales, and solid infrastructure—is responding by pivoting into high-margin, scalable models.
The Starting Point: A $30M Brand Under Pressure
Here’s what this company looks like:
✅ Sources most products from China
✅ Sells via Amazon, Walmart, Target, Home Depot, Lowes, and DTC
✅ Operates its own warehouse and fulfillment
✅ Maintains 40–50% gross margins
✅ Contribution margin: ~22% after retailer fees
✅ Faces rising tariffs and debt pressure
The problem? The old model can’t absorb today’s cost structure. They need new revenue models—ones with margin, control, and long-term upside.
Two Big Pivots to Reinvent the Business
Pivot 1: Turn the Warehouse Into a 3PL Business
This brand already excels in warehousing, fulfillment, and retail compliance. So why not become a third-party logistics (3PL) provider?
Why 3PL Works
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Monetizes existing infrastructure (warehouse, team, software)
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Helps DTC brands meet compliance requirements for Amazon, Target, Home Depot, etc.
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High-margin model—30%+ EBITDA compared to 10–15% from product sales
3PL Revenue Streams
| Service | Description |
|---|---|
| Storage | Brands pay monthly for pallet space |
| Order Fulfillment | Pick, pack, and ship |
| Freight Brokerage | Manage and negotiate freight |
| Returns & Kitting | Handle returns, bundling, prep for FBA |
Financial Upside – 100,000 Sq. Ft. Warehouse
| Service | Annual Revenue Potential |
|---|---|
| Storage (pallets) | $5M–$7M |
| Order Fulfillment | $1M–$2M |
| Freight Brokerage | $600K–$1.2M |
| Returns & Kitting | $1M–$2M |
| Total 3PL Revenue | $7M–$10M+ |
With 30% margins, that’s $2M–$3M in annual profit potential.
Ideal Clients
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DTC brands needing warehouse space
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Amazon sellers needing prep & fulfillment
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Importers shipping into major retailers
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Brands needing help with retailer compliance
How to Start
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Create a separate 3PL division and brand
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Start with 2–3 pilot clients
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Use tools like 3PL Central or ShipStation
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Leverage existing retail relationships to attract leads
Pivot 2: Build an Amazon/DTC/Retail Growth Agency
This company has years of experience in e-commerce, logistics, and retail sales. Why not help other brands scale for a fee?
Why This Works
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Brands need channel expertise—especially in Amazon, Shopify, and retail
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Low overhead, high margins—20–30% EBITDA is common
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Fast scalability with the right team and tech
Agency Services
| Service | Description |
|---|---|
| Amazon Management | Ads, SEO, listings, logistics, strategy |
| DTC Growth Strategy | SEO, paid ads, email, social media |
| Retail Expansion Coaching | Help brands enter Home Depot, Target, Walmart |
Revenue Potential
| Clients | Monthly Rate | Annual Revenue |
|---|---|---|
| 10 clients | $5K/mo | $600K |
| 10 clients | $10K/mo | $1.2M |
| 10 clients | $25K/mo | $3M |
| 20 clients | Scaled agency | $3M–$5M+ |
Who Would Hire This Agency?
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Amazon sellers struggling with ads, rankings, and inventory
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DTC brands stuck on Shopify
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International brands expanding into U.S. retail
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Small manufacturers trying to break into big-box stores
How to Start
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Leverage internal team to offer Amazon/DTC services
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Use AI tools for PPC and SEO automation
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Create case studies to attract new brands
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Offer retail strategy sessions and sales deck prep
Comparing the Two Pivots
| Factor | 3PL Business | Amazon/DTC Agency |
|---|---|---|
| Best For | Warehouse-heavy operators | Teams with e-comm experience |
| Margins | 30%+ EBITDA | 20–30% EBITDA |
| Scalability | Needs physical space | Easily scalable (team-based) |
| Revenue Model | Storage + per-order fees | Monthly retainers + % of spend |
Both models offer high-margin, high-leverage growth opportunities.
Final Takeaway: Reinvent or Risk Irrelevance
This $30M company is doing what more brands should:
✅ Turning operational strengths into revenue
✅ Building recurring income instead of chasing one-time sales
✅ Owning their future—not relying on volatile supply chains or retailers
The brands that survive this next decade will do more than just sell products. They’ll own their channels, services, and infrastructure.
If you ran this business, which pivot would you bet on—3PL or agency?
Drop a comment and let’s trade ideas.
