Why do distributors with the same sales volume have such different staffing and profit levels? Why do some distributors work frantically in the first half of the year and make big money, but in the second half their vehicles and staff sit idle and they lose money daily? Why do second-tier wholesalers and retailers make good money selling your products, yet your channel control remains weak? The answer lies in your product brand portfolio. A distributor's brand portfolio is a strategy that rationally combines brands from different companies to maximize resource efficiency, reduce operating costs, increase channel control, and boost profits. There are generally seven combinations: first-tier brands with non-brand products, volume products with high-profit products, off-season and peak-season brand combinations, mature brands with new brands, core products plus auxiliary products, channel compatibility and brand compatibility, and high-mid-low gross profit combinations. 1. First-tier brands and non-brand products combination Some distributors only handle branded products, while others only handle non-branded products. If you want to grow bigger and stronger, I suggest combining first-tier brands with non-brand products. First-tier brands can build the distributor's image because consumers and customers generally judge your business strength by the fame of the products you distribute. Distributing well-known brands greatly helps enhance the distributor's status. First-tier brands sell well but have relatively low profits, so it is recommended to also distribute high-quality products that are not yet brands, as these rely on channel profit push to increase sales. Use the channels built by branded products to gradually increase sales of non-brand products. Famous brands usually attract customers; distributors can use these products to "drive sales" by using well-known, price-sensitive brands as traffic generators to boost sales of higher-margin non-brand products, thereby improving the distributor's average profitability. 2. Volume products and high-profit products combination Volume products are not necessarily well-known brands; well-known products can also be volume products. Volume products are those that sell fast, have quick capital turnover, low profit, and rely on high volume and low margin. These products have very low profit but high sales volume, and second-tier wholesalers and terminals cannot do without them, helping to smooth channels and build customer relationships. For example: Henan's金星啤酒 (Jinxing Beer) with Moutai liquor, and思圆方便面 (Siyuan instant noodles) with杜康酒 (Dukang liquor). 3. Off-season + peak-season brand combination All products have sales seasons. For example, instant noodles are off-season from May to August for boiled noodles, but that is the peak season for crispy noodles. For养元六个核桃 (Yangyuan Six Walnuts), April to July is off-season, while beer, water, and tea drinks are in peak season during that period. If a distributor's product range is too narrow, there will be times of oversupply and times of no sales, leading to idle vehicles and staff and continuous losses. For example, a boss in the Zhengzhou market focuses very narrowly, distributing only one plant-based protein drink brand with annual sales of over 30 million yuan. Business is very good from August to March each year, but April to July is very tough. Because the brand's products mainly target the gift market, sales almost stop from April to July, leaving vehicles and staff idle, making it very difficult for the distributor. If he understood brand portfolio and also distributed a product that sells from April to July, his annual profit would increase significantly with the same resource allocation. 4. Mature brands and new brands combination New brands generally have higher profit margins than mature brands. Moreover, every brand has a life cycle, just like humans are born, age, get sick, and die. If you focus all your energy on one brand and that brand encounters a major setback, your business will be greatly affected. For example,健力宝 (Jianlibao),春都火腿肠 (Chundu ham sausage),三太子方便面 (Santaizi instant noodles), and三鹿奶粉 (Sanlu milk powder) – after these brands had problems, a large number of distributors suddenly went "back to square one," with business experiencing big ups and downs. In any industry, new brands emerge every few years. When new products enter the market, manufacturers' support and profit margins for distributors are relatively large; sometimes the profit on a new product is 2-3 times that of an old product. At the same time, there are always consumers who like to try new things. The reason China's economy is so dynamic is that challengers constantly appear. 5. Core products + auxiliary products combination Distributors without core products cannot grow big or strong. Core products are those that represent the distributor's personal brand, can generate volume, and support daily cash flow; they can also be called cash cow products. The more cash cow products you have, the better your profitability! Auxiliary products are those in the distributor's portfolio that currently sell moderately but have good sales trends, belonging to sunrise industries, enterprises, or products. With continuous promotion, they have the potential to become cash cows. These are star products; today's star products are very likely tomorrow's cash cows, so they are worth investing in. 6. Channel compatibility and brand compatibility combination If the brands a distributor handles have different sales channels and are incompatible, the sales models will differ, requiring separate sales teams, which increases management difficulty and costs. It's like asking one leader to manage both the navy and the army – neither will be managed well. For example, a food distributor also distributing feed, or a food distributor also distributing pesticides. If the products are compatible and compatible in channels, such as instant noodles, ham sausages, beverages, and beer, which are basically compatible in channels and brands, then they complement each other, and such a brand portfolio increases channel control. 7. High, medium, and low price combination Excellent distributors do not make money on every product but on every batch of products. Some distributors may lose money on a particular product, but overall sales are profitable. Such distributors use the "three-thirds" principle: one-third of products slightly lose money, one-third slightly earn, and one-third earn more. The one-third that slightly lose are common goods that cannot earn much anyway; these price-sensitive items attract consumers with just a slightly lower price, collectively called traffic products. The one-third that slightly earn are mature products that rely on volume and scale. The other third are the main source of profit, which can be sold along with traffic or mature products to earn high margins. Regardless of the product or brand combination, the goal is to increase sales and profit. In the process of brand portfolio, the most taboo is to handle brands of the same tier that compete with each other, such as distributing both康师傅 (Master Kong) and统一 (Uni-President), or both青岛 (Tsingtao) and燕京 (Yanjing). Even if you hold big brands, you may not necessarily have high sales or profits. Source: Distributor Column (ID: hanxiao9966) -END-