Splitting a client's website into multiple domains could affect you in branding (unless you incorporate the brand name and the vertical you want to split into the domain).
Subdomains only make sense if you really want to target different audiences and there is little chance of cross-over (i.e. there would be a slim chance that customers would overlap if you sell cosmetics on one domain and DYI products on another). The danger of subdomains is that if content is not properly managed, you will run into all sorts of content issues.
I would rather focus on a single domain with a good product category structure, product pages and a good set of landing-/conversion pages to target the different verticals.
I also think that a single domain will afford you better long-term value (both from a SEO and SEM perspective).