---
title: "Ten Steps Before Choosing a New Product: A Guide for Distributors"
description: "This article, originally from the WeChat account Jinxiaoshang, emphasizes the importance of rational analysis when distributors select new products. It outlines ten critical steps, including self-assessment, market conditions, manufacturer support, product selling points, profit margins, product movement, operational methods, launch channels, success cases, and market visits, to help distributors avoid failures and identify potential bestsellers."
author: "曾文忠 陈行军"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-05-02"
language: "en"
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# Ten Steps Before Choosing a New Product: A Guide for Distributors

> This article, originally from the WeChat account Jinxiaoshang, emphasizes the importance of rational analysis when distributors select new products. It outlines ten critical steps, including self-assessment, market conditions, manufacturer support, product selling points, profit margins, product movement, operational methods, launch channels, success cases, and market visits, to help distributors avoid failures and identify potential bestsellers.

This article is republished from the WeChat account: Jinxiaoshang.

In the daily operations of distributors, selecting new products is a crucial component. Many distributors, when facing failures after introducing new products, often blame the product quality or complain about the market environment. In reality, besides product issues, the problem may lie in the distributor's operational system or a mismatch between the product and the local market.

Unlike decision-makers in established enterprises, distributor owners rarely conduct rational market research or specialized analysis when deciding to take on new products. Instead, they rely on personal market experience and intuition, combined with a direct feel for the product. Overconfidence in their own judgment and ability to foresee market trends often leads to self-inflicted setbacks.

How can distributors identify potential or blockbuster products? It's not difficult! Just remember the following ten steps. (Here, we specifically discuss distributors of FMCG products like beverages and drinks.)

**First, Know Yourself.**
Distributors must assess their capabilities before accepting new products. Consider whether you have sufficient capital, channels, warehouse space, delivery capacity, manpower, social connections, and market reputation. Are you at a bottleneck in scale? Do you have ambitions for further growth? Is there still significant market space locally? Can you operate in larger regions or more categories? Does your main business rely entirely on the manufacturer or yourself?

The most important foundation for all operational decisions is self-awareness—clearly understanding your capabilities. "He who knows himself is wise; he who conquers himself is strong." If your capital, channels, warehouse, delivery, and manpower cannot support your ambitions, hasty or blind expansion will only lead to bitter outcomes.

**Second, Market Conditions.**
Distributors need to understand the local geography, permanent population size, population composition, ethnic customs, consumption habits, channel structure, number of manufacturers and their approximate sales scale, number of personnel from each manufacturer, the best channel customers for each brand, and untapped channel customers.

For example, Jianlibao's Fifth Season guava juice is essentially a regional flavor in South China, especially Guangdong. Initially launched nationwide, it only thrived in Guangdong. In 2006, Uni-President and Master Kong followed suit with guava juice, hastily pushing it into most markets, but it went unnoticed. Wanglaoji herbal tea took five to six years to gain market acceptance in the north. Therefore, distributors should thoroughly consider local market conditions when selecting new products and avoid products that do not fit the local market.

**Third, Manufacturer Support.**
Manufacturer support includes policy support, personnel support, resource support, expense support, and financial support. Policy support refers to the manufacturer's sales policy, whether exclusive distribution or channel distribution, appropriate sales targets and rebates, product knowledge training, and market guidance. Personnel support involves the manufacturer's sales team structure and organization. Resource support includes freezers, materials, media placements, and signage production. Expense support covers costs for market development and maintenance, such as shelf placement, samples, gifts, tasting events, venue rental, displays, entry fees, festival promotions, and discounts. Financial support includes whether the manufacturer offers special payment terms, how expenses are reimbursed and the timing, and the manufacturer's financial cooperation level.

**Fourth, Product Selling Points.**
More precisely, this refers to the unique selling proposition (USP). Any new product without a standout selling point cannot survive in the market.

Product taste is the most basic element of a selling point. A good product must first have good taste, especially if it adopts a "mass-market" pricing strategy. The taste must appeal to the general public, at least meeting their expectations and needs; otherwise, the selling point cannot be justified.

The USP can also be derived from packaging and specifications, differentiation in category and brand proposition, and differences from similar products. Does the price have a comparative advantage? If there are no similar products, is the price justified? Can consumers accept this price point? Are there differences in sales channels?

**Fifth, Product Profit.**
Profit is certainly a key reason for distributors to choose new products. The level of profit depends on the manufacturer's strength and its sales performance in the local market.

Not all high-profit products are viable, and low-profit products are not necessarily unviable. It depends on the overall product mix. Profit should not be viewed only in absolute terms but also in terms of gross margin. A product priced at 100 yuan with a gross profit of 5 yuan versus a product priced at 30 yuan with a gross profit of 2 yuan: the absolute profit of the 100 yuan product is higher, but the 30 yuan product has a higher gross margin contribution.

Product gross profit includes channel profit and distributor profit, in addition to the selling profit. However, these are static profits. Actual profit is closely related to product movement, expenses, logistics speed, operational efficiency, and expansion of channels and regions.

**Sixth, Product Movement.**
Product movement is key to product survival.

**Movement = Distribution Rate × Recommendation Rate × Visit Rate × Merchandising × Promotion × Customer Relationship**

**Distribution Rate** refers to the product's visibility in the market. It creates market atmosphere and increases opportunities for consumers to see the product. The fundamental purpose of marketing is to create momentum; strong momentum makes efforts more effective. The level of terminal distribution determines the product's visibility and market momentum.

**Recommendation Rate** is the quality of recommendations at sales terminals. By building core stores, you can leverage their enthusiasm for recommending new products, create a demonstration effect, establish product influence, and build confidence among other follow-up terminals, thereby driving sales at other points. Core stores are those with strong recommendation capabilities, larger scale, longer operating history, and influence over other terminals and consumers. Focus resources, attack key points, and rely on these stores' recommendations to quickly drive product movement.

**Visit Rate** is not just about frequency but more importantly the quality and effectiveness of visits. The main value of terminal visits is to clarify the purpose, achieve results, identify problems, and solve them.

**Merchandising** primarily creates an atmosphere for product movement, induces consumers, and changes their acceptance psychology. Merchandising stems from three levels: product displays (stack displays, end-cap displays, special-shaped displays with supporting materials), strong ambiance, and route or area merchandising.

**Promotion** is a core component of product movement. Target core consumer groups and core consumption venues, combining promotions, experiences, and tastings to drive sales of new products and help consumers quickly accept them. Promotion is generally divided into channel promotion and consumer promotion.

**Customer Relationship** is not about the number of visits but the actual value brought to terminal customers. Effective customer relationships are not solely based on material benefits but on customers recognizing the value you bring.

**Seventh, Operational Approach.**
Will the manufacturer launch the new product through direct operations or distributor operations? Will it be a single-region trial or a full launch? Will it be exclusive in the region or split by channel? Will it be manufacturer-led or distributor-led? Will it be single-channel or full-channel? Will it use a single model or a composite model?

Different approaches place distributors in different positions in the product value chain. The operational approach determines the size of investment in capital, warehousing, personnel, and resources.

**Eighth, Launch Channels.**
What are the launch channels? Special channels, supermarkets, wholesale markets, or tobacco and liquor stores? When a product first enters the market, choosing the right channel is crucial. It is important to select channels that match the product's selling points. For example, Uni-President's 100% tomato juice was launched at a retail price of 6 yuan per can. Initially, Uni-President chose a full-channel launch in South China, but the result was poor sales and massive returns from channel customers. After 2008, Uni-President adjusted the launch channels, focusing mainly on KA and special channels. Although the product is still not a huge success, it has established a loyal consumer base and stable sales.

**Ninth, Success Cases.**
If a product has no successful market or channel, the risk for distributors is high. Success cases serve as models and replicable hope. How a distributor operates a new product may not entirely follow their own established model; they should reference the manufacturer's operations and channel management. How did the manufacturer operate in successful markets? How did the product succeed? Which aspects can the distributor replicate? What needs strengthening? What should be learned? Success cases provide compelling reasons for distributors to say yes.

**Tenth, Market Visits.**
On-site visits to the company and product operations are the final step. What to inspect? Company qualifications, strength, production, leadership team, company goals, financial capability, transportation capacity, local market operations, and the performance of the best-performing stores. Beyond these, inspect details! No matter how good the company's publicity is, if details are poor, the manufacturer has no future. Material stacking, waste disposal, cleanliness, warehouse management, business conduct, and daily meeting systems all reflect the manufacturer's determination and capability. Because details determine success or failure!

Below is a product selection table based on the ten items above.

The table has ten items, each with scores allocated by importance, totaling 100 points. If a product scores above 60, distributors may consider it. The higher the score, the higher the likelihood of it becoming a blockbuster.

Of course, these are not absolute. This provides distributors with a more scientific and self-based set of considerations to minimize irrational judgments about a product's success. Whether to choose a new product depends not only on these considerations but also on making a firm decision.

Reply with the following keywords to search and read related professional articles: Sales Supervisor, Second-tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Distributor Game, Product Stagnation, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Channel Promotion, Sales Misconceptions, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Closing, Market Visit Inspection, Baijiu, Beer, Sales Increase, Agency Products, Cross-region Sales, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, Sales Novice, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Franchise Recruitment, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Stock Pressure, Festival, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Work Report, Work Report.


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