This study is motivated by a real-world case in China. Affected by the geopolitical tensions in the Middle East, a Chinese mechanical watch component manufacturer has suffered a sales decline of nearly 50% since 2024, largely due to its reliance on a single B2B channel. To address this, the study proposes a dual distribution strategy integrating the B2B channel with online B2C sales supported by offline services. The online product range mainly features Do-It-Yourself (DIY) mechanical watch kits, designed with modularity and personalization to boost enthusiasts’ engagement and enjoyment. To match customers’ varying assembly abilities, products are categorized as loose-part kits, semi-finished kits, and fully assembled watches. This study focuses on four decisions for the new B2C channel: (1) optimal pricing across product types; (2) evaluation of offline service models, comparing in-house and outsourced centers; (3) service network location planning; and (4) determining who bears the service fee in outsourced centers. A mixed-integer nonlinear programming (MINLP) model is developed by simulating demographic and geographic data from all 297 cities at the prefecture level and above in China. A decomposition-coordination strategy is employed to decompose the complex problem into three interrelated subproblems: pricing, service network design, and payment allocation, which is solved by CPLEX. The study is expected to provide guidance on these decisions, enhancing customer experience while maximizing corporate profitability. The proposed methods can also be applied to other situations, such as IKEA’s furniture supply chains.