--- title: "Distributors That Don't Launch New Products Never Grow!" description: "Distributors who only sell mature products won't succeed. Launching new products is key to growth, as it brings manufacturer support, higher margins, better channel utilization, and new channel expansion. Successful new product launches also offer opportunities for second-time entrepreneurship and enhance a distributor's reputation." author: "New Distribution" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2014-07-12" language: "en" canonical: "https://xinjignxiao.com/en/articles/distributors-that-don-t-launch-new-products-never-grow-ca2b0d59/" markdown: "https://xinjignxiao.com/en/articles/distributors-that-don-t-launch-new-products-never-grow-ca2b0d59.md" original_source: "https://mp.weixin.qq.com/s/1oQ-3ss8YMYqzuVXz2fk8Q" translation: "https://xinjignxiao.com/zh/articles/%E4%B8%8D%E4%BC%9A%E6%8E%A8%E6%96%B0%E5%93%81%E7%9A%84%E7%BB%8F%E9%94%80%E5%95%86%E6%B0%B8%E8%BF%9C%E9%95%BF%E4%B8%8D%E5%A4%A7-ca2b0d59.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/distributors-that-don-t-launch-new-products-never-grow-ca2b0d59/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Distributors That Don't Launch New Products Never Grow! > Distributors who only sell mature products won't succeed. Launching new products is key to growth, as it brings manufacturer support, higher margins, better channel utilization, and new channel expansion. Successful new product launches also offer opportunities for second-time entrepreneurship and enhance a distributor's reputation. **Reminder: Click the blue text above to follow "FMCG Distributor Professional Consulting" for more marketing and distributor internal management insights.** Distributors who only sell mature products won't succeed. Give you Master Kong's红烧牛肉面 or P&G's Rejoice, and under these big brands, you can easily generate volume without much effort. What truly tests your ability is being given a new product. With a similar market starting point, how do you perform compared to other distributors? Conversely, a distributor skilled at launching new products will excel in strategy, management, execution, and competition handling, leading to more growth opportunities! **First, launching new products gains manufacturer policy support.** When launching new products, companies often provide incentives; companies that don't understand incentives are also making a mistake in new product promotion. In 2000, P&G launched Rejoice shampoo, sparing no effort in consumer activities—advertising, new product launches, and promotions—but without special support for channel profits, which was one of the main reasons for this failure. Distributors grow with companies. Niu Gensheng said: Resources are not about ownership but about control. This applies to distributors as well. For old products that sell themselves, companies are unwilling to invest more, so distributors should leverage the company's investment in new product operations to build "your" market and accumulate gradually. **Second, new products have higher gross margins.** Due to manufacturer policy support and non-transparent pricing, new products always have more gross margin space. For example, Shuanghui "Wangzhongwang"—a product that has sold for over 20 years, with annual sales exceeding 10 billion, and sells itself—why would they give customers such high profits? Earning a "delivery fee" is already good. For Uni-President instant noodles, giving distributors a 5-point delivery fee is quite generous. New products have more "commercial flow" requirements—distribution, display, promotion—so they naturally allocate more. If "Wangzhongwang" offers only 8 points of gross margin, new products should give you no less than 15 points. **Third, better utilization of channels.** The network that distributors have painstakingly built is like highways and rural roads, delivering products continuously to various terminals. Once you build roads, you want more cars to run, and more utilization brings more "toll fees." Similarly, channels need to carry more products, especially high-margin ones, to adjust the distributor's profit structure. Some distributors understand this and may take on multiple brands. For example, those doing instant noodles might also do ham sausages, sell water or beverages, or even enter condiments. However, for distributors, spreading efforts across many brands is a misconception! We used to say "putting eggs in different baskets reduces risk," but at the same time, it also dilutes our focus. In reality, the larger a distributor becomes, the more concentrated their brands (or categories) are. If you have 10 brands, you're somewhat like a wholesaler; with 30 brands, you're a retailer! So diversifying into different brands isn't necessarily the path to growth. Focusing on three to five brands or one or two categories, introducing new products, and adjusting product and profit structures is the right way. Therefore, the ability to promote new products is essential for distributors to grow. **Fourth, new products can expand a distributor's new channels.** Products and channels must be compatible, requiring different positioning for channel expansion. Thus, new products cannot rely solely on old channels. Shuanghui's "Paomian Paidang" ham sausage—just hearing the name might help you expand into "stations and docks" channels; "Taiwanese Grilled Sausage" might help you expand into tourist attraction channels; "Q Qu" can help you expand into internet cafe channels. Don't look down on these "special channels." Back then, Xiangpiaopiao milk tea started from "internet cafe" channels. **Fifth, sometimes new products are a great opportunity for our customers' second-time entrepreneurship.** If you've become the regional leader in a certain category, breaking through further may hit a bottleneck. Introducing a new product is certainly an opportunity. For example, Grace towels had already become the category leader, and the company felt it was hard to break through further, so in recent years they have continuously launched new categories, such as underwear and cotton socks in 2010, and thermal underwear and stockings in 2011, which are also second-time entrepreneurship opportunities for many customers. Finally, a higher pursuit: successfully launching a new product for customers brings a great sense of achievement. After the storm of battle, you and your team will be greatly improved. In fact, when brand companies recruit distributors, besides evaluating your ability based on the brands you represent, they also look at whether you have successfully operated new products—this is a more important indicator. So this is also your halo. All in all, distributors who don't launch new products have limited development and find it hard to grow. --- **Like this article? Feel free to share it to your Moments by clicking the top right corner;** About us: WeChat Name: FMCG Distributor Professional Consulting Management Account Intro: 20 years of FMCG distributor operation and management experience, professionally addressing distributor internal issues: Click "Read the original text" below to enter our micro-community for interaction and Q&A. **Learning and exchange QQ group: 344257092** **Reply 1 to enter the micro official website to view historical messages.** --- --- ## Copyright and AI use This article is sourced from New Distribution. 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