Private label is a business method that is growing strongly and with great potential, chosen by more and more sellers with the advantage of easily building a personal brand in the future. In this article, we would like to provide some detailed information about this method.
What is private label?
Products manufactured or supplied by one company that are then labeled with another company’s brand will obtain the product’s private label. The manufacturer only makes the product line to supply a single retailer and they will have the exclusive right to sell this item.
Examples of private label products
Products which normally apply this approach are cosmetic and personal care products; beverages and dairy products; frozen foods; condiments and sauces; paper products; household cleaners; clothing and fashion goods; pet food and accessories.
Advantages and disadvantages with private label
When selling products under this model, the retailer has the right to direct the supplier about the composition of the product, the manufacturing process and the quality of the finished product. This helps businesses control the production process, production costs and determine the selling price, so businesses can also customize the profits from this cooperation.
Besides, with this private business model, your business monopolizes the supply of products bearing its own brand, creating its own mark and setting itself apart from competitors. If promotion and marketing are good, the benefits will be great, because your business is the only supplier of this branded product in the market.
When doing business under this label model, although you have control over the production process, you are still not the unit that directly creates the product, so part of the quality of your product still depends on the manufacturer. If their staff’s skills are not high, or problems arise, it is likely that the quality of goods will decrease. In addition, your exclusive product line is only available in a limited number and only sold in one store, so it is difficult to build customer loyalty.
Start your own private label product business
To start this business model, you first need to identify the right target product. You should choose a developed niche to both avoid competition and have a ready customer base. You should choose essential consumer goods such as clothing, food, cosmetics, etc. Then, the important step is to find a supplier. You need to find a supplier with suitable policies for you. Research on policies and conditions of cooperation, and at the same time, choose the right partner based on the nature of the target product you have targeted to.
You also need to order samples from partners to experience, test and evaluate the quality yourself. This helps you to detect errors early to respond and ask the supplier to fix. Once your product has been completed, proceed with promotion and marketing to let more people know about your business and products. Create an online store or sales website, upload beautiful images and advertise on multiple channels.
Private labels are a great way for those who want to start selling a new product but have no experience. If you need assistance in managing this business model, feel free to contact us.