Standalone, solo-entrepreneur run brands can move fast and have an advantage in being more nimble compared to larger organisations. However, after hitting some scale, there are many upsides from being part of a larger house-of-brands. Particularly so if there are common target segments and themes across the brands.
Here are five reasons why building a brand within a broader group is advantageous.
1) Access to more resources:
Standalone brands have limited resources available. This could be in the form of people, money or time. But as part of a larger group, brands have access to a larger pool of specialised resources which can be used to grow the brand faster. For example, a brand can tap into the group’s sales and marketing specialist teams to help with distribution and promotion. At a larger scale, the group can be on the cutting edge of marketing (e.g. social selling) and channels (e.g. TikTok shop). Similarly, there is usually better access to capital as well.
2) Increased visibility and reach:
There is increased visibility and reach that comes with being part of a house-of-brands. This is because the group would have a larger distribution capabilities, customer base and marketing footprint. Consequently, brands would get more exposure and be able to reach more people.
3) Shared R&D:
Another advantage of being in a group is that you can share resources for research and development, especially in terms of market research and consumer understanding. This allows brands to save on costs and get access to better insights to develop products.
4) Supply chain scale advantage:
Another key advantage is the scale advantages that come with being part of a group in terms of the supply chain. This is because the group would have more negotiating power with suppliers and be able to get better terms. In addition, the group can also share resources across brands in terms of the supply chain, which leads to cost savings.
5) Improved risk management:
Lastly, being part of a group also leads to improved risk management. This is because the group would have a diversified portfolio of brands, which leads to reduced risk. In addition, the group can also spread the risk across different geographies and markets. A standalone brand in comparison may have high volatility and cash flow requirements.
Rainforest is building a house-of-brands with products focused on the modern parent. If you have a relevant brand or know of one to refer to, contact us!