Did you know that Walmart has an astonishing 29,153 private label products on its website? These are products that Walmart puts out under its own brand, that are manufactured by a third party. But did you know it is not just the major retailers that are cashing in on this retail revolution?
Companies are realizing that private labels are low-cost but offer a range of advantages over traditional supply methods. Read on as we give our guide on private label products.
What Is a Private Label?
A private label is a product produced by a third party, which companies sell under a brand name. The retailer decides how the product is packaged and the precise sales specifications. This is then delivered by the third party to them.
It differs from branded label products as the product does not rely on suppliers to deliver the product. As they do not have to manufacture the products themselves, they can easily increase product ranges and put new brands into consumer’s hands.
What Industries Use Private Label Products?
Supermarkets have been using private labels for a long time. Cereals, bread, sauces, tinned goods, and many others are all often private labels sold at different prices. Make-up, grooming, personal hygiene products, and even clothing companies all use private labels.
Advantages
Private label products are extremely adaptable. A company can contact a private label manufacturer, detail the product they want, and have it delivered. They do not have to buy expensive machinery to manufacture it themselves.
The retailer also has more control over the production of the product. They can easily adapt ingredients, and change specifications. This can be vital in a modern market, where trends change quickly.
The cost is also something the retailer can adapt. When buying from a supplier, costs are fixed. However, with private labels the buyer can give and take from certain parts of the chain, creating the best margins.
If you are a retailer, then you also control the branding. People can begin to identify your products, instead of simply the brands you sell.
This makes it extremely easy to start up your own brands as a business. For example, this article on private branded cleaning chemicals – create your own brand, can have your business started in no time.
Disadvantages
The only real disadvantage is that it can take some time to build brand loyalty. You will be competing with national and multinational companies existing properties. In some instances, people may have been using these products all their life.
If you already have a brand set up, and want to branch out into other products, then it may be easier. It may also work well if you have an established group of loyal followers, on social media or through an existing business. In any instance, you should accompany the product with a strong marketing campaign to get it off the ground.
Finding a Third Party
If you are interested in private label products, then there are a number of manufacturers who can assist. Check online and ask others in your sector who they have used. Many manufacturers will be willing to accommodate even the most specific of needs.
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