The commercial due diligence blind spots in consumer brand deals

Distributor revenue is not demand

International revenue booked through distributors or franchise partners frequently reflects stock pushed into a channel rather than product sold to consumers. Sell-out data, reorder patterns and partner inventory tell a different story to the top line, and they are often available if asked for early enough.

Landed economics at the next scale

Models that work at current volume can quietly break at the volume in the plan — in freight, duty, returns, minimum orders or working capital. Rebuilding unit economics at the target scale, per market, is unglamorous and regularly changes the price of the asset.

Brand elasticity and the pricing question

Consumer diligence tends to test whether the brand is loved. The more useful question is whether it can carry price, extend into an adjacent category, and survive being sold somewhere new without diluting what made it work.

• Which customers would pay more, and which would leave.
• What the brand means in the markets on the expansion list, not the home one.
• Whether growth so far came from the brand or from a distribution accident.

Management capability against the plan, not the past

The team that built the business to this point may not be the team that can execute the next move. That is a statement about experience, not ability, and it is far cheaper to establish before completion than after.