Two distributors import goods from the same supplier, at the same price and quality, but one sells out in three weeks while the other holds onto the stock until after Tet (Lunar New Year). The difference rarely lies in the product itself. It lies in whether the product range matches the characteristics of the market where you sell. A high-end oolong tea is difficult to sell in a working-class neighborhood, while large bags of raw tea leaves are meaningless in a tourist-filled old town. This article presents a method for reading the local market and translating what is learned into a specific, verifiable, and cyclical product range.
1. The portfolio is the result of reading the market.
The most common mistake when building a product catalog is basing it on the seller’s personal taste. Tea vendors often have their own preferences, favoring plain tea, Shan Tuyet tea, or Oolong tea, and unconsciously build their entire catalog around those preferences. The problem is that personal taste only represents a very small group within the actual customer base.
The right product catalog should answer a series of market questions: how much money is available to spend on tea in this region, under what circumstances do people drink tea, where do they buy it, how much do they buy at a time, and at what time of year do they buy it? Four pieces of information need to be gathered before finalizing the catalog: income levels, regional habits, density of consumption points, and seasonal patterns. The following four sections address each of those pieces of information.
2. Read the income levels and price levels in the area.
Income levels in a region don’t determine the quality of tea to import, but rather the specifications and price points. For the same Thai Nguyen green tea, middle-income residents will buy a 100-gram package at a common price on a monthly basis, while high-income residents will accept a 200-gram box at three times the price because of the packaging and the story behind the tea’s growing region.
A quick way to check is to survey the price levels in the area: record the selling prices of five to seven tea products circulating at nearby outlets, and identify the price range where most transactions fall. The portfolio should have at least sixty percent of its products within this price range. Those outside this range should only serve to expand the upper or lower boundary, not be the backbone of revenue.
3. Regional tea-drinking habits
Tea consumption habits in Vietnam are distinctly differentiated by region, directly impacting the tea selection. The North favors plain green tea with a distinctly astringent yet sweet aftertaste, consumed daily and on special occasions such as weddings, funerals, and Tet (Lunar New Year); lotus tea and jasmine tea hold a firm place in the gift category. The Central region has a preference for strong, hot brewed tea, along with a significant demand for herbal teas.
The South tends towards lighter flavors, favoring flavored teas, jasmine tea, and affordable iced tea, and has a very high demand for brewing ingredients due to the high density of beverage shops. The highlands and tourist cities, on the other hand, lean towards oolong tea, specialty teas, and souvenir products. Dealers serving a particular region should base their focus on the region’s dominant consumer habits before adding other product lines.
4. Density of cafes and demand for beverage ingredients.
The number of bubble tea shops, coffee shops, restaurants, and hotels within the delivery radius is the strongest indicator of whether or not to include beverage ingredients in the product category. This group has characteristics very different from consumer goods: large packaging sizes from one to five kilograms, low unit prices, thin profit margins, but consistent and predictable production volume.
A medium-sized beverage shop consumes raw tea materials weekly, generating a much more stable cash flow than individual customers. If the area has a high density of shops, the product catalog should allocate about twenty to thirty percent of its product codes to raw black tea, jasmine tea, oolong tea, and green tea for brewing. Conversely, if the density is low, including this group will only increase inventory without generating commensurate revenue.
5. Seasons and purchasing patterns throughout the year
The tea industry has seasonal cycles at both ends. For raw materials, the spring harvest yields the best quality tea buds, the summer harvest produces high yields but with a coarser flavor, and the autumn/winter harvest offers a richer aroma and is generally preferred in the high-end segment. For consumption, demand surges in the fourth quarter and leading up to Tet (Lunar New Year) due to gift-giving, and decreases significantly during the hot months when consumers switch to cold beverages.
The product portfolio needs to be designed to absorb this pace rather than endure it. Gift and box packaging should be prepared from September, with quantities finalized before the peak season. Herbal teas, flavored teas, and fruit tea ingredients should increase their weighting during the hot season. Shifting weighting quarterly helps prevent capital from being tied up in out-of-season products.
6. Three categories are needed.
After analyzing the market, the portfolio should be structured into three distinct layers. The first layer is the cash flow driver: mainstream green tea, tea bags, and brewing ingredients. This group has a fast turnover, thin profit margins, but sustains daily operations, typically accounting for 45–55% of sales.
The second tier is the profit margin line: oolong tea, flavored tea, blended tea, and teas with attractive packaging. This group sells slower but contributes the majority of actual profit, accounting for approximately 25–35% of sales. The third tier is the positioning line: ancient Shan Tuyet tea, specialty white tea, and limited-edition seasonal products. This group may only account for less than 10% of sales but determines how customers perceive the dealer’s reputation and is often the reason for repeat customers.
7. Choose specifications and packaging according to customer requirements.
For the same type of tea, changing the packaging means changing the target customer and price point. 500-gram packages or 1-kilogram bags cater to regular customers who buy for long-term consumption and small cafes. 100-200 gram packages are the most common retail size, making purchasing decisions easier. Gift boxes of 2-4 jars are for gifting occasions. Boxes of 25-50 tea bags are for offices and hotels. 3-5 kilogram bags are specifically for brewing.
The principle is that each main product should have a maximum of two to three variations, no more, because each variation is a separate inventory item with its own packaging costs. The choice of which variation to use depends on how the largest customer group in that area purchases, not on what packaging is currently available in the warehouse.
8. Test with a small batch before scaling up.
All market predictions are just assumptions until actual sales figures are available. The least expensive way to verify this is to import small batches, enough to sell for four to six weeks for each new product, along with a sample quantity to offer to wholesalers and repeat customers. During that time, record three figures for each product: the number of units sold, the number of repeat customers, and the time the goods sit in inventory.
A product that sells thirty percent of its trial batch in six weeks with no repeat buyers is a signal to stop, even if the seller thinks the product is good. Conversely, a product that sells out before four weeks needs an immediate increase in quantity, and the supplier’s ability to maintain a consistent supply should be checked before committing to wholesale customers.
9. Product addition and removal cycles
The portfolio should be reviewed on a fixed schedule rather than only when instability is detected. A reasonable pace for most agencies is once every quarter, followed by a major review before the peak season at the end of the year. Each review should answer three questions: which stocks contribute the most revenue and profit, which stocks are too old for their expiration date, and which customer groups are asking for items that the portfolio doesn’t yet include.
The operating principle is simple: each time a new product code is added, a weaker one should be removed to prevent the total number of codes from expanding over time. For products with a shelf life, such as tea, a product code that is more than two-thirds past its expiration date should be handled through promotions or group sales, rather than being held onto waiting for customers.
10. Portfolio decision-making framework for dealers
The entire process can be summarized into five steps, repeated quarterly. Step one: Describe the regional market using four data points: income, habits, density of consumption points, and seasonality. Step two: Identify the two largest customer groups and select tea lines that cater to those groups first. Step three: Allocate the portfolio according to three classes: cash flow, profit margin, and positioning.
Step four: Select specifications for each code and import a controlled trial batch. Step five: Measure using three metrics: sales, repurchases, and inventory time, then cut or expand. A good portfolio isn’t one that includes every tea variety, but one where the seller can explain why each code is present and who that code serves.