Shared services: what two brands can share

Share the cost base, not the brand

Once there are two or three brands, every operating question reduces to one: what does this brand share, and what does it own. Share too much and you get two brands that sound like each other, which defeats the reason you started a second one. Share too little and the portfolio costs more than the brands did apart.

One line holds most of it. Share the work that is identical and whose output is fungible. Keep separate the work that requires knowing the brand.

What genuinely shares well

Warehousing and the 3PL contract. A 3PL prices on volume and minimums, so two brands arriving as one account negotiate better than two arriving separately. Run the same scorecard you would for one brand, then add a clause: separate stock ledgers per brand inside one facility, with cycle counts reported per brand. Pooled space, separated books.

Finance, reconciliation and compliance. Settlement reconciliation, payout tracking, tax deductions. Procedures, not judgments.

The co-packer relationship, with one check. A plant already qualified for you is faster and cheaper for brand two. What does not carry over is licence scope: an FSSAI licence is granted to a unit for specified product categories, so confirm your second brand’s product sits inside it before planning a run. The selection criteria do not change, nor does the cost of changing one later.

Account structure and SOPs. One catalogue standard, one set of checklists, one document pack built once. The method shares. The numbers never do.

What must not be shared

Brand voice and creative. People share this first because it reads as a saving, and it is what dissolves the reason for two brands. If the second brand exists because positioning was the constraint, sharing a creative team without separating the brief reproduces the constraint. Separate briefs, and no asset crossing brands, photography included.

The customer list, where the reason is legal as well as commercial. Under the Digital Personal Data Protection Act, 2023, Section 5(1) requires a notice stating the purpose for which data is proposed to be processed, and Section 6(1) limits consent to that specified purpose. A customer who agreed to hear from brand A has not agreed to hear from brand B, and a shared company name does not change it. Handle it in your consent design and know which role you hold. Commercially it is a bad trade anyway: promoting a value brand to a premium list devalues the list.

One entity, several brands: accounts, GST and invoices

Proprietorship, LLP, private limited or OPC is decided by liability, compliance load and funding intent, and that comparison does not change because you added a name. Three things are specific to several brands under one roof.

GST registration attaches to the legal entity and its PAN within a State, not to a brand, so one company can sell several brands under one GSTIN. The portal supports recording additional trade names against the same registration through a core field amendment, a facility GSTN enabled in 2022; how many it permits is a portal limit, so read the current form. The operational consequence is the invoice, which is issued by the entity, so a customer of brand B receives a document in the company’s name.

On marketplaces the default is one account holding several brands. Amazon’s Seller Code of Conduct tells sellers not to operate more than one selling account without a legitimate business need, and Amazon’s guidance is one account per region unless that need exists and all accounts stay in good standing. Distinct brands are among the examples given, so it is permission rather than a right. Brand Registry then enrols per brand, each needing its own registered or pending trade mark. Flipkart requires a brand approval per brand, with a trade mark or an authorisation letter naming your seller ID. Flipkart publishes little consolidated seller detail here and most of what circulates is third party, so get the requirement from your category manager in writing.

The cost of one account is concentration. If it is deactivated every brand goes dark the same morning, which raises the stakes on account health. If you later conclude a brand needs its own entity, that is a migration, not a setting: read what does not come with you first.

Allocating shared cost so each P&L is honest

There is no reliable published benchmark for shared overhead in a multi-brand Indian D2C business. Anyone quoting a percentage is guessing. Use a method.

Charge direct costs direct. Cost of goods, that brand’s freight, platform fees and ad spend. If it can be traced it is never allocated. This is contribution margin discipline one level up.

Give every shared cost a driver the brand owner can move. Warehouse rent by space occupied or units picked. Logistics by the unit the contract bills. Finance by transaction count. Not by revenue, because that taxes the brand that works to subsidise the one that does not.

Publish the driver before the period. Every allocation argument is retrospective, and agreeing the basis in advance turns a negotiation into arithmetic.

Keep an unallocated line and do not force it to zero. Some cost belongs to the group and to no brand.

Then run the stand alone test. If this brand bought the same service outside at market rate, what would it pay. If your internal charge is higher, the shared service is a tax. That test has a second use: a group management fee or shared warehouse charge moves a brand’s profit number, which matters if a brand is ever sold on an earnout measured on profit.

When the shared team stops helping

The failure signal is queueing, not cost. Four forms: the newest brand’s launches always slip, the team serves whoever asks loudest, aggregate reporting hides one brand’s decline until it is large, and the smallest brand gets the least attention exactly when it needs the most.

A shared pod scales on transaction volume, not on brand count. Operations, catalogue hygiene and reconciliation scale, because the work is procedural. Merchandising, creative and category judgment do not. The stage by stage structure holds inside each brand; only the procedural layer flattens.

The Monday version is a two column sheet. Shared: warehouse, 3PL contract, finance, reconciliation, compliance, the co-packer relationship, the SOPs. Separate: voice, creative, merchandising, pricing decisions, the customer list, the P&L. Then give every brand one named owner who answers for that P&L, even when every function under them is shared. A portfolio without named owners is one overloaded team with several logos.