---
title: "Distributors Who Can't Launch New Products Will Never Grow Big!"
description: "A distributor who only sells mature products won't succeed. Under the banner of big brands, distributors can generate volume without much effort. What truly demonstrates your capability is when you're 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 must excel in strategy, management, execution, and competition, leading to more growth opportunities! 01 Launching new products gains manufacturer policy support. When operating new products, companies often provide incentives; companies that don't understand incentives are also misguided in new product promotion. P&G's launch of Runyan shampoo spared no effort in consumer activities, with continuous advertising, new product launches, and promotions, but without special support for channel profits, which was one of the main reasons for P&G's failure."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-05-04"
categories: "Brand Marketing, Dealer Operations"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/distributors-who-can-t-launch-new-products-will-never-grow-big-c46ac666.md"
original_source: "https://mp.weixin.qq.com/s/vtj0gktKqkg8lfisw_ZVKw"
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citation: "New Distribution. “Distributors Who Can't Launch New Products Will Never Grow Big!.” New Distribution, 2018-05-04. https://xinjignxiao.com/en/articles/distributors-who-can-t-launch-new-products-will-never-grow-big-c46ac666/"
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# Distributors Who Can't Launch New Products Will Never Grow Big!

> A distributor who only sells mature products won't succeed. Under the banner of big brands, distributors can generate volume without much effort. What truly demonstrates your capability is when you're 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 must excel in strategy, management, execution, and competition, leading to more growth opportunities! 01 Launching new products gains manufacturer policy support. When operating new products, companies often provide incentives; companies that don't understand incentives are also misguided in new product promotion. P&G's launch of Runyan shampoo spared no effort in consumer activities, with continuous advertising, new product launches, and promotions, but without special support for channel profits, which was one of the main reasons for P&G's failure.

A distributor who only sells mature products won't succeed. Under the banner of big brands, distributors can generate volume without much effort. What truly demonstrates your capability is when you're 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 must excel in strategy, management, execution, and competition, leading to more growth opportunities!

**01**
**Launching new products gains manufacturer policy support**
When operating new products, companies often provide incentives; companies that don't understand incentives are also misguided in new product promotion. P&G's launch of Runyan shampoo spared no effort in consumer activities, with continuous advertising, new product launches, and promotions, but without special support for channel profits, which was one of the main reasons for P&G's failure.

Distributors grow by relying on companies. Niu Gensheng said: Resources lie not in possession but in allocation. This applies equally to distributors. For mature products that sell themselves on the shelf, companies are unwilling to invest more, so distributors should skillfully use the company's investment in new product operations to build "your" market and accumulate gradually.

**02**
**New products have higher gross margins**
Because of manufacturer policy support and opaque pricing of new products, new products always have more gross margin space. For example, Shuanghui "Wangzhongwang" has been sold for over 20 years with annual sales exceeding 10 billion; it sells itself on the shelf. Why should 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, such as distribution, display, and promotion, so naturally they are allocated more. Therefore, if "Wangzhongwang" only offers 8 points of gross margin, new products should offer no less than 15 points.

**03**
**Better utilization of channels**
The network that distributors have painstakingly accumulated is like building highways and field paths, delivering products continuously to various terminal stores. Once roads are built, you naturally want more vehicles to run, and more utilization brings more "road maintenance fees."

In fact, channels also need to carry more products, and more high-margin products to adjust the distributor's profit structure. Some distributors understand this principle and may take on multiple brands to operate.

Those who make instant noodles might also make ham sausages, sell water and beverages, or go into condiments. However, for distributors, spreading efforts across multiple brands is actually a misconception! Previously we said "putting eggs in different baskets can spread risk," but at the same time, it also spreads our energy.

In reality, the larger the distributor, the more concentrated their brands (or categories) become. If you have 10 brands, you're somewhat like a wholesaler; with 30 brands, you're a retailer! So diversifying into different brands is not necessarily the path to growth. Focusing on three to five brands or one or two categories, introducing new products to grow, and adjusting product and profit structures is the right way. Therefore, the ability to promote new products is a necessary capability for distributors to grow big.

**04**
**New products can expand distributors' new channels**
Products and channels must be composite, requiring different positioning of products to differ in channel expansion. Therefore, new products cannot rely solely on old channels. Shuanghui's "Paomian Paidang" ham sausage—just hearing the name might help you expand channels at "stations and docks"; "Taiwanese grilled sausage" might help you expand channels at tourist attractions; "Qqu" can help you expand channels at internet cafes. Don't look down on these "special channels"; back then, Xiangpiaopiao milk tea started from the "internet cafe" channel.

**05**
**New products are a good opportunity for customers' second entrepreneurship**
In certain categories, if you've become the regional leader, further breakthroughs may hit bottlenecks. Introducing a new product is certainly an opportunity. For example, Grace towels have already become the category leader, and the company feels it's not easy 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 opportunities for many customers to start a second business.

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 judging your capability by which brands you represent, they also look at whether you have successfully operated new products—this is a more important indicator, so it's also your halo.

For all these reasons, distributors who can't launch new products have limited development and find it hard to grow big.

Source: Winning Power


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## Citation metadata

- Publisher: New Distribution
- Author: New Distribution
- Published: 2018-05-04
- Canonical: https://xinjignxiao.com/en/articles/distributors-who-can-t-launch-new-products-will-never-grow-big-c46ac666/
- Original source: https://mp.weixin.qq.com/s/vtj0gktKqkg8lfisw_ZVKw

## Copyright and AI use

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