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Many companies have a one-sided approach when operating short-term products: they always hope to use short-term products to open the market, followed by profitable long-term products, ultimately reaping substantial profits. In reality, this involves certain misconceptions, and the final results often surprise: short-term products are in short supply, while long-term products are ignored. The company's enthusiasm turns into a futile effort. Therefore, as FMCG companies, they should also find clever and flexible ways to make money from short-term product operations. Here are three ways to make money with short-term products.
Seek Profit Through Scale. Short-term products are often short-lived because of their strategic mission. For example, short-term products are often "cannon fodder" products that disrupt the market, beat competitors to a pulp, and then exit the stage. Thus, they are not expected to make money. However, in reality, many distributors only sell the right (short-term) products, not the expensive (long-term) ones. Since short-term products have lower prices and relatively larger profit margins, distributors are often keen to sell them, making them hot items and leaving companies "unable to stop." In such cases, companies must put effort into short-term products to make them profitable. Since short-term products often have smaller profit margins, to make them generate sufficient profits, companies must increase volume to achieve scale advantages. To achieve the goal of profit through sales volume and scale, FMCG companies must do the following: 1. Short-term products should be relatively short. They should not be so short as to incur losses; their price should be comparable to the main competing products in the market, using the market leader as a benchmark, with prices slightly lower (around 5%) to leave enough operational space for the product to sell well and create a scale effect. 2. Have attractive market pull measures. To scale up short-term products, market pull is essential. If a new product cannot create a hot-selling trend in the short term, it will likely die slowly in lukewarm sales. Therefore, the launch of short-term products should include reasonable and clever market pull, such as novel promotional formats, appropriate advertising, and continuous terminal merchandising. Through strong early market pull, create a hot-selling atmosphere to make the product quickly popular and alive, achieving short-term volume increase. 3. Ensure sufficient product supply. For short-term products that rely on scale for profit, manufacturers must ensure adequate supply. Product sales depend on "momentum"; by creating a hot-selling "momentum," sales quickly form an "inertia" or "potential energy," driving sales to soar. To achieve this, companies must avoid stockouts to boost distributor confidence and facilitate volume growth. For example, a instant noodle company, in response to a competitor's "Ganchi Huang" product in its home market, launched a short-term product "Xiangsu Wang." The product was priced closely to the competitor, but during the initial launch, they introduced in-box prizes (scratch cards) for consumers and cumulative sales awards for channel partners. As a result, the product quickly became a hot seller, and due to careful planning, sufficient raw material procurement, and smooth logistics, it soon reached nearly 400,000 boxes per month. Later, as market pull gradually decreased, the company both hit competitors and gained profits, achieving a win-win for profit and market.
Profit Through Structure. Using volume to achieve scale benefits is one way to make short-term products profitable; another is through reasonable product structure, i.e., combining short-term and long-term products. When short-term products cannot contribute profit due to market competition, using the popularity and sustained sales of short-term products to drive sales of long-term, profitable products—i.e., leveraging a reasonable product portfolio—is an effective way for companies to earn profits. To achieve profit through product mix, companies generally use the following methods: 1. Set a "bait." That is, be good at casting a long line to catch a big fish. The specific steps are: initially promote short-term products, which may be loss-making but serve as "bait" to approach competitors' cost or price bottom line, gaining absolute market competitive advantage, and giving channels and consumers a good impression of "high quality and low price." However, manufacturers need to set a reasonable profit margin for channel partners to sustain sales. By meeting the needs of all links, short-term products can build a good reputation and trigger a buying frenzy among channels and consumers. 2. Launch combination packages. When channel partners and consumers are hooked, manufacturers must act quickly to introduce related, preferably series, long-term profit products and bundle them with short-term products, thereby achieving the goal of using products to support products and ultimately gain profit. Here, many companies use product combination packages, offering certain promotional discounts after a certain ratio combination, to "cross the sea by a trick" and transition smoothly, leaving no gaps. 3. Run in parallel to steadily gain profit. After the product combination is sold as a package, it should be institutionalized and consistently executed to achieve product transition, allowing channel partners and consumers to move from non-acceptance to acceptance, and finally to recognition, liking, and becoming loyal consumers of both short-term and long-term products.
Operate Short-Term Products with a Long-Term Approach. Operating short-term products with a long-term approach is also a clever way for companies to earn profits. But this is only a temporary measure and cannot be done long-term. Product prices should match their functions and value; operating short-term products with a long-term approach must be phased, but companies should use this phase to quickly profit and then quit while ahead, making profits faster and healthier. The key points for operating short-term products with a long-term approach are as follows: 1. Develop a long-term product strategy. That is, position and plan short-term products as long-term products. From pricing to channel selection and promotion planning, follow the long-term product approach. For example, use high-price, high-promotion market operations, reserving larger operational space to continuously activate channels and terminals through promotions, displays, and ground promotions. 2. Systematic and sustained promotion. Operating short-term products with a long-term approach must be systematic and sustained; otherwise, it may backfire and make customers doubt the company's credibility. Systematic here means that market promotion activities should be phased, step-by-step, interlinked, forming an organic whole, not starting strong and ending weak. Through systematic and sustained promotion, the product can maintain continuity, operate stably and healthily in the market, and achieve profit plans. 3. Keep products moving to activate channels. Since short-term products have shorter cycles, after a certain period, companies should continuously change operational tactics and hold novel promotional activities to keep the market dynamic and vibrant. Specific methods include periodic rebates, in-box prizes, buy-one-get-one offers, and advertising campaigns to create market highs and continuously break sales records. For example, a large beer company, facing low-priced beers from small manufacturers disrupting the market, launched a marginal short-term product—pineapple beer. This product, between beverages and beer, had lower tax rates, so it was priced low but still had significant operational space. After launch, the company promoted it as a long-term product. Due to its low price, vouchers, cumulative promotions, and continuous support from free tastings, plaza promotions, and beer festivals, it not only effectively blocked competitors but also turned this differentiated short-term product into a long-term product. In 2006, this product accounted for over 60% of the highest sales volume in one of the company's plants, earning substantial market profits.
Additionally, modifying or adjusting short-term products can also generate profits. For example, some instant noodle companies, after launching short-term products that sell like hotcakes, quickly adjust the product form by changing packaging specifications (reducing the number of packets but with minimal price reduction) or reducing capacity (e.g., lowering gram weight from 100g to 90g, which consumers may not notice), thereby reducing costs and increasing or expanding profit margins, achieving profitability for short-term products.
In summary, there are many ways to make money with short-term products, but regardless of the method, it must not be at the expense of product quality or deceiving consumers; otherwise, it is like losing the substance for the shadow, and ultimately the manufacturer suffers. In fact, as long as manufacturers skillfully play the product card and put effort into promotions and market development, making short-term products profitable is not difficult.