What to do practically should already be outlined in your service/placement agreement with this vendor.

I like the idea of selling on your own for two reasons: 1) more control and insight into your inventory and sales traction figures and 2) when the time comes again to work with 3rd parties to sell your product you'll have better insight on what does work (what you've done) and what doesnt work (what your current partner is doing) to give better guidance to make both of you a success.

the answer to this too can be a little dependent on industry - my experience in helping our clients mostly deals with the fashion and food spaces. so FYI/full disclosure there. In those cases though they encountered the exact problem you are, so we pulled their product arrangements, created a digital and self-owned space where they could sell their product and build a community of buyers, then they went back out after getting some traction and were better able to negotiate with bigger players (Nordstrom, Macy's, Whole Foods, etc) to take full advantage of affiliate buying and marketing.

Happy to connect and talk through your own specific situation; best of luck in either regard.