Just like ghost writers in freelancing where a piece of copy is written by someone else and marketed under someone else’s name, there are phantom brands or phantom products that are manufactured by one company but they sell for another company’s brand. These are known as private label products. These could also be services as explained above. Usually there are product lines consisting of various products under the same umbrella and these could become the best private label products.
If you want to become a part of this type of business, the best way is to import private label products from another country like China and then sell it on sites like Amazon. This is not only the best but also the easiest and most straight forward way to become an entrepreneur right from your home. You will be choosing and providing your own brand name as well as logo. You don’t have to invest a lot of time in designing or creating your own unique product. But the result of this exercise is still a branded product that most people like to buy and this is the biggest advantage of using private label products.
The suppliers provide product catalogs for reference. You must remember that these catalogs are for reference only and it doesn’t mean that all items in a particular catalog have already been manufactured. The resultant product may not be according to your expectations. In some cases, the manufacturers or suppliers do not product their own products. They outsource the job to some other company and earn commission. These are some considerations that you need to review before stepping into this type of business.
For some people, importing private label products may not be as easy as they might think. At times the person requesting a private label product would also have to invest in tooling and production of a specifications list. Designing a product yourself is a better alternative than going through all this hassle. Moreover, the supplier would also expect internal quality guidelines from you and offer no guarantees of the product they are sending over. In some cases, the private label product comes out as a patented item owned by someone else.
If you have decided to go into private labeling and selling, you must find suppliers first and these may include wholesalers, distributors or manufacturers that are capable of providing you with the product. Domestic sourcing is usually associated with higher manufacturing costs and therefore most people consider overseas sourcing mostly from China. You can visit sites like Alibaba to look at hundreds of suppliers and choose one according to your requirements. Search for supplier directories online to get started with this type of business right away. It is recommended to make a list of all suppliers that catch your eye and this would require you to dig deeper on search engines so that a few suppliers that appear on the last result pages may also make their way into your list.
What Are Private Label Products and How You Can Be a Part of It?
Private label products are manufactured or established by one company but are sold under some other label by another company or an individual. Not only the products but various services manufactured by one company can also be provided by someone else in this way. The best way to make money using private label products is to import products from any of the foreign countries like Japan, Russia, Spain, China, etc. and to sell them under your own brand’s name. Branding your own products or the products that have been imported from some other country and company will make you really successful in establishing a strengthened private label. Mostly, private label products are sold electronically on already existing sites like Amazon but can also be sold by developing a new site or a web page.
Although selling private label products is a profitable E-business, yet every individual who invests in this business is not always successful. Selling products manufactured by one company under your name or even branding your own products is not as easy as it seems. In some cases, you as an individual, may have to pay excessive delivery charges, pay the money for setting up the business, and have to pay a professional if you cannot design your own products label digitally. Most importantly, sometimes the quality of delivered product is different from that of original product your brought and you might end up in a loss.
So, before starting a private label business for selling products, it is essential to find suppliers that provide the best quality products with low delivery charges. It is also essential to build profitable relationships with suppliers. Some important aspects of this business will be discussed in detail below which will help one in easily setting up such a business:
How to Set Up Private Label Products?
The first thing to become a part of private label products’ business is its establishment. To brand your own products and to set up your own private label brand, some important steps must be followed carefully. Given below are the ten important steps that can help you in branding your own products manufactured by some other company through a proper process. You pick and choose any step that your think must be performed first and any that you think is useful if performed on a later stage.
- Searching the Target Market or Products
First step is to examine the target market or products. Research various categories of markets and products. Choose the best product for your private label business. You can either choose a single product or choose multiple products. Some best products to be resold as private label products are shoes, dresses, furniture, crockery, etc. since they never go out of demand. Design your own brand label related to the target product as this will help you to make your business successful and efficient.
- Determine the Niche of Market
To brand your own product, search the niche of the market first. A niche is a distinct market having preferences and characteristics of its own. Selection of the best niche for your private label business helps you to brand your own product in an attractive and unique way. Various factors that can help one to determine niche of the market are demographic, price, quality, behavior, culture, geographic nature, etc. One can consider a single factor or a combination of multiple factors to determine the niche that is to be considered while setting up your own private label products brand.
- Search for The Potential Competitors
After deciding the niche of the market and the product or service you want to serve, search for your competitors in the same niche and with the same target products. Gather as much information as possible about your competitor. Use the information about this competitor to provide the value to your customers and to deliver the desired satisfaction better than your competitors do. Brand your product and design your own products label better than that of competitors’. Do the best you can in order to be preferred more than your clients as compared to your competitor in all the possible manners.
- Analyze Your Ability to Cover Manufacturing Cost
Setting up any business, either an online business or a traditional one, requires investment. The amount of money used to set up the business depends upon the size, place, product, and promotion of your business. Analyze how are you going to cover up all the cost associated with setting up your business and the cost associated with branding your own products, designing your own brand label, and delivering the products to the final buyers. A good idea is to first compute all the money you have and then choose the product or niche according to the calculated sum of capital. Moreover, in the case where you are trying to set up a private label brand, it is natural to expect yourself to have a very tight budget. Obviously, anyone having oodles of money would be able to design the products themselves and there would not have been any need for buying another product and merely labelling it as their own. In such cases, it is better if you try to cut the cost as much as possible in every aspect without compromising on the quality. Moreover, keeping a fraction of money intact for emergency uses is also a better idea since new private label businesses usually have to do a few refunds to save their repute.
- Find the Best Manufacturer
Since in the private label products business the products are manufactured by one company but are sold by some other company, the one who manufactures the product must provide the best quality product along with timely shipping. It is very important for the owner to find the best suppliers. When private label business owner is satisfied about the quality and timely delivery of the product, he or she can brand and promote his or her private business more effectively and efficiently. It is better if your try to look for an owner or a manufacturer who is directly in contact with you all the time. This reduces the risks of the products quality not coming out as they were supposed to be and saves you.
- Creating Your Business Identity
In this step, your business is finally established and has identity of its own. Creating a business identity means selecting the best name for the business, design your own brand label, choosing the color of label, developing the slogan or a jingle for the business, or doing any other advertisement related effort.
- Ordering the first batch of products
After creating the identity of the business, you should move forward towards ordering the first batch of the products you have to sell to your customers. In the mean time I, as a private label products business owner, will do my best to brand my own products.
- Launching A Site
The next step is to launch a website on which you will sell your private label products. Be careful while launching a site. If you are not an expert, it is advisable to take help from an expert. Right after launching the site, use your best efforts to brand your own products as much as possible.
- Take Time to Market Your Site
Do not start putting up the products for selling right after launching the site. Take some time for the promotion of your business and product. During this time be patient as it can take days or even weeks. Upload the products for selling when you feel that your site has become popular among people. Also, make sure not to upload more than two products in the beginning.
- Collect Customer’s Feedback
After delivering the first batch of production, collect customers’ feedback and ask for their advices regarding how to improve the product. Communicate the feedback and advices of the customers to the manufacturers in order to improve the success rate of your private label business.
Benefits of private label products for sellers
Now that you know how to become a seller of private label products, second important thing is to find the advantages that lie in selling these private label products. Individuals may choose to invest in private label products because of the benefits that these products offer to the sellers. Given below are some common advantages of selling private label products that will boosts one’s interest in setting up such a business:
- Exclusiveness
The most important and a common benefit of private label products is exclusiveness. Private labelling allows its sellers to sell something unique and different from the competitor to the customers. Developing your own market identity and unique design of your own product label will help you maintain a stronger relation with customers and the demand for your certain product will also increase.
- Faithfulness
A faithful customer contributes a lot in making a business successful. In private label products, branding your own products in a unique way builds customer loyalty and faithfulness. After branding your products, offering the high quality products in a lower cost can also help the seller to gain loyalty form customers. The more a customer is satisfied from your service, the more your business’s chances of success will be.
- Branding
As mentioned above, branding your products in a unique way helps you in gaining loyalty from customers. Manufacturers as well as the sellers of private label products brand their products in a manner that it captures the customer’s attention. Products packaging includes the product name, description, logo, slogan etc. Branding in such a manner personalizes customers experience which will lead to the success of the business. So, we can say that branding is an advantage for private label products seller.
- Higher Profit Margins
Private label products offer higher profit margins compared to other products. It is because the cost associated with manufacturing your product is low and this lower manufacturing cost leads to higher profit margin.
- Day to Day Operations
Since in the private label products seller is directly connected with supplier and all concerned sources, the direct involvement of seller in manufacturing of private label products helps him or her in controlling day to day operations easily and efficiently.
- Globalization
Selling goods manufactured by one company of one country and their distribution to some other country promotes globalization. Globalization will help the sellers in making their business successful as they can get higher profits by selling international goods rather than national goods.
- Value
Value is also another important factor associated with the success of a business. You, as a private label products seller, can provide value to the customer by branding your own products, keeping the prices low, timely delivery, excellent quality. To conclude we can say that private label products seller can easily provide value to their customers which will cause their business to be successful and popular.
- Easy controlling
As private label product seller can easily keep an eye on the pricing, size, quality, demand, supply, availability of the product, seller use these controlling techniques to gain competitive advantage and become popular in the private label products brands line. So, controlling also is an advantage for the sellers.
How to Find the Manufacturers of Private Label Products?
As we have already discussed that the success of the seller of private label products depends on the manufacturer of the goods. So, one must be careful while choosing the manufacturer of the goods as an inefficient manufacturer can seriously affect the business of selling private label products. The question is how to find the best manufacturer given below are some tips that will help one to find the best manufacturer of private label products:
- Using Search Engines
Search engines are the best way to find out anything you need. In the case of searching private label manufacturers; Google, Bing, Yahoo, AOL, Ask.fm, etc. can play a vital role. Using keywords like private label manufacturers, private label suppliers, best private label manufacturers can help one to get grab an idea about the best manufacturer. Similarly applying various search filters like location, availability, the niche of the market, type of products they provide, etc. one can easily find the best manufacturer of private label products.
- Using Online Directories
Similar to the search engines, one can also use online directories to find the best manufacturer of private label products. Online directories can save one time and can provide one with the list of the best manufacturer within minutes. Some common directories to find the best manufacturers are Oberlo, Alibaba, Global sources, etc.
- Hiring an Agent
To find a manufacturer you can hire an agent or representative working on your behalf to find out the best manufacturer for you. If you want your manufacturer to be International, it is preferable to hire an agent that is fluent in manufacturers’ native language. The agent will also act as a negotiator and will help you to bargain with the manufacturer or supplier, will gather all necessary information about the manufacturers and will discuss all terms and conditions.
- Using Expert Opinion
If you want to find the private label product manufacturer urgently you can ask experts of private label companies, certain communities help one to ask and share private label manufacturers about their experience. These communities are also known as the forum. Ask any information you want by conversing with people who have worked with private label manufacturers in the past. Keep their reviews and experience as a key tool while choosing a manufacturer of private label products. Some common forums are Quora and Reddit.
- Searching Marketplaces
Another way to find private label manufacturers is by searching marketplaces. You can search for a private label product manufacturer in a chosen niche and then proceeding by contacting various suppliers and then selecting the one that you think is best for you.
Things to Consider While Choosing Supplier of Private Label Product
we have discussed how can we choose a manufacturer of private label products in detail. In this section, we will discuss the factors or points that must be considered while choosing a manufacturer to be successful in your private label product brand. One cannot choose a manufacturer without giving prime importance to some points or factors. These factors include price, quality, the span of delivery, the quantity of supply, charges associated with delivery, payment method and many other such factors. Given below is an in-depth discussion of each of the mentioned factor:
- Price of the Product
The most important thing to consider while buying or selling any goods is its price. To find the manufacturer first ask him or her about the price you have to pay him or her to get the desired product. If the price does not suites you or your agent can ask him to bargain it the price, as you also have to pay the charges associated with branding your own product. If the price still does not suit you move on towards some other manufacturer offering the same product with the same or improved quality at a lower price.
- Quality of Product
Another important thing to consider is the quality of the desired product. If the manufacturer is providing the goods with truncated quality, it can seriously affect your brand and all the efforts for promotion and branding of your own product can go in vain. So, while choosing the manufacturer never compromise on the quality of the product he or she offers. Even if the price of the product is too low and you have incentives to sell it at the profit, still do not agree with the manufacturer to providing goods of the same quality because it will seriously damage your reputation
- Span of Delivery
Third important factor is the time span associated with delivery of desired products for selling. As private label products are imported from some foreign country, so their delivery take a quite long time. while choosing the manufacturer of private label product that delivers the desired product in shorter span of time. Also make sure that the products will be delivered within stated time so that you can plan the promotion, distribution or can carry on the process of taking pre-orders within time.
- Quantity of Supply
While choosing manufacturer and deciding how to be a part of private label product. Ask the quantity of products a manufacturer can easily and efficiently deliver. Fix the quantity of supply that a manufacturer can deliver in one time. Also make sure that the quantity of private label products should not affect quality of the desired products.
- Delivery Charges
To become a part of a private label product, you should also consider the charge associated with delivering the batch of products. Delivery charges are high if the product is manufactured internationally. Despite the fact that the seller will receive more than half of the amount of delivery charges by delivering products to the customers, still the delivery charges to be paid to the manufacturer should not be much high. Chose the manufacturer who offers the best quality products in time with low shipping charges.
- Payment Method
Always ask the manufacturer for the best mean through which you will transfer money to him. Payment method may include cash on delivery, online transfer, PayPal, payment by bank transfer etc. Suggest the method that is best for you to the manufacturer.
Risks Associated with Private Label Products
Along with discussing the benefits of private label product it is also important to keep in mind the risks associated with selling private label products, so that one can easily handle them. Some important risks associated with it are:
- Failure to Get the Desired Quality
Bad quality is also a risk to brands selling private label products. As a newly established or highly-reputed brand never sell something bad under its name. if the manufacturer delivers something with bad quality the cost given to manufacturer to produce it will be wasted. For investors to face this issue it is advised to consider all the factor giving above while choosing manufacturer so that they can avoid such issues.
- Branding
Branding is both opportunity and risk for private label product. Poor branding and promotion techniques can make your brand unsuccessful. So, while starting a business you are advised to put as much efforts as you can in branding order to achieve the desired result.
Conclusions
To conclude we can say that this entire document covers private label products, steps to set up a brand dealing with private label products, its advantages, and risks and after reading it carefully one can easily become a part of private label products. Also, with the advancement of technology, brands providing private label products are becoming more popular day by day and in the future, such brands are expected to generate more revenues than the brands providing other products. One thing that must be kept in mind is that no matter how good the quality of the product is if you do not have advertised, promoted, or marketed your brand in the right way it can seriously affect your private label products. Make sure to brand your products uniquely and the design of your own product label should be different and better than other companies. Another important thing associated with private label products is its manufacturing and this post also entails the tips to choose an efficient manufacturer along with some facts that must be kept in mind while searching for a manufacturer. Popular examples of private label products are Amazon, target’s mainstays, Alibaba, etc.
