VOL. XCIV, NO. 247

MOAT TYPE BREAKDOWN

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Tuesday, December 30, 2025

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Supply moat

Distribution Control Moat

43 companies · 93 segments

A supply-side moat where a company has privileged access to, ownership of, or control over key distribution channels that gate demand. Competitors may have a good product, but cannot reach customers efficiently (or at all) without the same channel access.

Domain

Supply moat

Advantages

5 strengths

Disadvantages

5 tradeoffs

Coverage

43 companies · 93 segments

Advantages

  • Demand gating: preferential access can keep competitors out or relegate them to inefficient channels.
  • Lower cost-to-serve: route density and scale reduce per-unit distribution costs.
  • Faster scale-up: incumbents can roll out new products quickly across existing channels.
  • Better unit economics: superior terms (fees, rebates, placement) improve margins versus peers.
  • Data and feedback loop: channel control yields better demand signals and inventory optimization.

Disadvantages

  • Channel dependence: gatekeepers can renegotiate terms, squeeze margins, or de-prioritize you.
  • Disintermediation risk: new channels (DTC, new platforms) can bypass incumbents.
  • Fixed-cost burden: owning distribution can be capital intensive and sensitive to utilization.
  • Regulatory risk: exclusivity, rebates, and access control can trigger antitrust scrutiny.
  • Complacency risk: protected access can hide product weakness until the channel shifts.

Why it exists

  • Channel scarcity: shelf space, placements, slots, and attention are limited.
  • Gatekeeper power: distributors/retailers/platforms decide what gets surfaced and bundled.
  • Economies of route and coverage: dense distribution networks lower delivery and service costs.
  • Relationship and trust: long-standing partnerships and performance history win preferential terms.
  • Infrastructure ownership: owning the channel (stores, fleet, last-mile, installs) creates structural control.

Where it shows up

  • Consumer packaged goods and retail (shelf space, planograms, end caps, promotions)
  • B2B distribution networks (industrial supplies, pharma wholesalers, specialty channels)
  • Platform marketplaces and app ecosystems (ranking, default placement, store inclusion)
  • Telecom, utilities, and device channels (bundles, carrier distribution, installers)
  • Last-mile logistics and delivery networks (dense routes, pickup/dropoff points)
  • Advertising and media distribution (inventory access, preferred programmatic pipes)

Durability drivers

  • Owned infrastructure that is hard to replicate (fleet, warehouses, retail footprint, installers)
  • Dense coverage and route economics (scale that materially lowers cost-to-serve)
  • High performance with channel partners (on-time, low returns, strong sell-through)
  • Contractual advantages (preferred status, long-term agreements, exclusives where allowed)
  • Omnichannel resilience (presence across multiple channels to reduce single-gatekeeper risk)

Common red flags

  • One channel dominates and is actively squeezing terms or launching private label alternatives
  • High trade spend required to maintain placement (access is rented, not owned)
  • Channel shift makes the old advantage less relevant (new platform, new buyer behavior)
  • Distribution costs rise faster than revenue, revealing weak route economics
  • Competitors achieve similar placement quickly, implying the channel is not scarce

How to evaluate

Key questions

  • Is the advantage true control (owned channel / exclusive access) or just good relationships?
  • How scarce is the channel, and how hard is it for a competitor to get equivalent placement?
  • What is the dependency risk: what happens if one gatekeeper changes terms or priorities?
  • Is the channel shifting (platform changes, DTC growth, new intermediaries)?
  • Does distribution control translate into sustainable margins and share, or just volume?

Metrics & signals

  • Channel concentration (revenue share by top distributors/retailers/platforms)
  • Placement and share-of-shelf/share-of-surface (where measurable)
  • Unit distribution and velocity (sell-through per store/channel, returns, spoilage)
  • Cost-to-serve and route density (distribution cost as % of revenue, last-mile efficiency)
  • Trade spend and take rates (rebates, promotions, platform fees) and their trend
  • Speed of rollout for new products (time to national launch, distribution ramp)
  • Churn/retention of channel partners and renewal/renegotiation outcomes

Examples & patterns

Patterns

  • Dense logistics networks that deliver faster/cheaper than new entrants can match
  • Preferred retail placement driven by proven sell-through and replenishment reliability
  • Installer or service networks that gate adoption in physical categories
  • Platform distribution advantages via default inclusion, ranking, or bundling

Notes

  • Distribution control is strongest when access is structural (owned or contract-protected) and route economics create a real cost gap.
  • If access is mainly bought via promotions or fees, treat it as a spend-driven advantage, not a moat.

Examples in the moat database

Curation & Accuracy

This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).

Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.