Despite considerable research relating to product variety, few studies have analyzed the impact of product variety on distributors. Furthermore, compared to research on product variety, service variety has been overlooked in the literature. This dissertation consists of three essays: Essay One examines the direct effect of product variety on sales, its indirect effect on sales through stockouts, as well as the total impact of product variety on sales performance. Essay Two develops a moderated mediation model to investigate how service quality and market performance are affected by service variety and the interaction impacts of different types of services. Essay Three analyzes a dynamic system, which includes influences of product and service variety on demand and costs and their reverse impacts on variety decisions.