What is Private Labelling and How Can It Help My Business?
Ever scanned the shelves of various retailers and noticed the countless products from well-known brands and independent labels stocked? If so, perhaps you’ve wondered about the possibility of getting your own brand to sell. Well, we’ve got good news. It’s very much possible!
When entering the business world in the hopes of starting your own brand or line of products, you will have noticed the term ‘private labelling’ come up. Private labelling is a smart business decision used by established brands worldwide to manage a diverse range of goods or a singular product.
Launching and running a business is tough. But with the right contacts and industry knowledge, you can outsource certain aspects of the process to expert private label manufacturers. You don’t have to do everything yourself, and as you’ll soon find, it’s simply not always possible.
Most companies can take advantage of private labelling. The key benefits are transferable to start-up businesses that want to launch a collection and established brands that want to expand. Outsourcing production makes growth possible while saving time, money and stress.
Private label companies offer an alternative solution. It could be the answer you’ve been searching for to jumpstart your business.
To let you in on this top industry secret, let’s start by defining what private labelling is, what it means to sell private label products and the many advantages of private label offerings.
What is Private Labelling?
Private labelling is when a business outsources the production process to a private label manufacturing company. The company essentially creates the products sold under the brand name, and many companies use this method to bring their own branded products to life.
Private label lines are available for all kinds of goods. Product categories range from beverages, skincare and cosmetics to pet foods and laundry detergent. If there’s a product in existence, there’s likely a private label brand ready to produce it. So, if you’d like to start your own brand to sell products, a private label manufacturer can help lift it off the ground.
Most retailers stock private label brands. Chances are, you will have come across several private label products in the grocery store, the salon and online. They appear as regular branded goods to consumers, as the private label manufacturer is kept discreet. The company will not claim copyright or include its name on the product line. Although many consumers are oblivious to the concept, private labelling is widespread in today’s market.
For private labelling to go ahead, you need to partner with a private label manufacturing company. Finding the right one is a difficult task. Some work with multinational brands, while others focus on small and medium businesses.
Many companies vary in cost, expertise and specialised products, so it’s crucial to find the best candidate to help your business succeed, whatever your size.
Once connected, you can start discussing ingredients and formulas that you want to put your name to, keeping the requirements of your target market in mind.
Why Choose Private Labelling?
People choose to private label products for several purposes. Conjuring up the idea to sell products with your name and own branding to increase your profit margins might feel like a lightbulb moment. But have you thought about how you’re going to pull it off?
Whether food or skincare, there are countless decisions to be made. Launching your own products to sell requires an entire supply chain. There’s the creation, lab testing, manufacturing, storage, transportation, distribution and marketing. And that’s before it reaches retailers or the hands of your customers.
Private labelling relieves you of the energy and time it takes to manufacture your branded product. When it’s all taken care of, you can focus your energy elsewhere to develop a popular brand that breaks into the industry.
While this briefly summarises the top reason brands sell private label products, let’s look at the key benefits in more detail to see why private labels succeed.
How Can Private Labelling Help My Business?
Private labelling can help your business to thrive, even if you’re a small company with an even smaller reputation. Here are some of the advantages we favour the most.
It builds your brand
With private labelling, you can set your brand up for success. If you already own a business, private labelling can help you bring branded products as well as the other services you offer. It’s a great way to earn extra income.
Adding products to your online store and promoting them through marketing will also build your brand name. Consumers will soon see your brand name in stores, on your website and on social media channels. It will become more recognisable, boosting your reputation and driving customers to give your products a try.
Using private labels may also give you a competitive edge over other brands. For example, if you are a salon owner and launch your own products, it makes you stand out from the salons that don’t have products for sale under their own store name.
And when your products are of excellent quality, you increase your brand loyalty.
It’s cost-effective when done right
Starting your brand with sellable products takes money. A private label manufacturer eliminates the business costs of renting a manufacturing space, storage space, lab equipment, machinery and more. The accumulation of fees can add up to a pretty hefty bill.
Private label manufacturers already have the means and the sources to produce products quickly and effectively at affordable prices. Instead of managing several outgoings, you can negotiate an all-around price.
It’s extremely time-effective
As the saying goes, time is money! Having the time to do things and do them right is essential for any business. But when you’re trying to juggle an unattainable workload, your business soon begins to suffer.
Private labelling companies take care of the manufacturing process for you. It frees you from designing formulas, buying ingredients, tracking inventory, manufacturing and packaging items.
The lengthy process eats up hours of your day, leaving you with zero time to spend on the other corners of the business that can help it blossom. Marketing, online business presence and excellent customer service all require attention.
There’s no telling just how free you will feel from handing over that large chunk of responsibility to somebody else. Of course, you must select a private label company you can trust.
The turnaround time is quicker
Your average working day is likely jam-packed. But there’s only so much you can do in 24 hours, especially working alone or with a small team. It soon becomes impossible to keep up with orders as your business grows.
Private label manufacturers have the capabilities to produce a diverse range of products much quicker than you possibly can. Labs are fully equipped to handle large orders ready to ship on time and in shorter periods. There’s no messing around with private labelling.
You can adapt products easier
If it takes all your energy and resources to master a single product, you can’t suddenly switch to making another formula or introducing a new product. However, when you private label, you can adapt your product line easily and quickly to include other products or add new features.
You might want to amend the materials, colour, or formulas so the goods are entirely unique.
Private label product manufacturers have the expertise
You might have done your industry research, but if you’ve never had your own products before, it can be overwhelming. You might have to deal with certain things when manufacturing items, such as legal issues, warranty obligations, and professional standards legislation. It can get complicated.
When you find a reliable private label brand, you can rest assured that they have the knowledge and experience to run your manufacturing process smoothly. They can handle the above measures, ensuring everything is above board and according to industry standards.
A private label business will also have a team of experts designing the formulations, whatever your product type. You can join a specific company with staff trained in the field of your interest, whether skin care, hair care or home cleaning items.
It reduces the risk
Private labelling can help reduce the risks associated with starting up a new business. Many companies offer affordable contracts to newcomers with low minimum order quantities so you don’t end up with excessive stock that you can’t shift. It allows flexibility before committing to bulk buying.
Custom samples are another way to mitigate the risk of what you’re buying. A lot of private label companies allow you to test the formulas before giving them the green light.
Lots of consumer products must be carefully tested before reaching the public. For instance, beauty products must abide by industry guidelines and standards to ensure the safety of use. As specialists make the products for you, the risk is immediately reduced.
You can still make decisions
When working with a third-party company to private label, you don’t instantly lose all control over the product development process.
You can discuss production directly with the company, making decisions about which ingredients to use, the materials for packaging, sustainable solutions, product quality and your own branding.
It helps you to manage pricing
As you’ve refined and optimised your production costs through private labelling, you can now better determine your product cost. A good pricing strategy allows you to make the most profit possible from your product range, securing healthy profit margins.
Who is Private Labelling Suitable For?
Private labelling is suitable for various brands seeking to start or expand their business through selling private-label goods. You can benefit from working with a private label manufacturer, from national brands and multinational brands to start-ups and smaller established brands.
As there are so many private label manufacturers in operation, one manufacturer may offer different solutions to others. It sometimes depends on the size and type of company you have.
For example, Australian Private Label is a 3PL business that works with small to medium eCommerce brands, focusing on skin, hair care and lifestyle product categories. Partnerships are made with start-up businesses, established brands, and hair and beauty salons.
New businesses can take advantage of low MOQs, custom samples, expert knowledge and professional advice for your small company. If you’re an established business, you can use private labelling services to help you expand.
Salons and spas can benefit from further sales by directing clients to shop your own brands.
Whatever your position in the industry, selling private label products brings opportunity and greater potential to prosper.
Getting Started with Australian Private Label
Suppose your private labelling interest lies in the cosmetics industry. In that case, Australian Private Label provides smaller online stores with several services, including private label products with custom formulation, pumping and labelling service, storage, packing and live inventory management.
The process is relatively simple, and there are no issues with flexibility. You can be as involved in the production and manufacturing process as much as you like.
There are over 250 ingredients to choose from as you decide on the formulas you want to sell. Organise a phone call with the formulations team to converse until the right combination of ingredients and essential oils is determined. A
Next, you’ll receive a custom sample to make sure you’re 100% happy. You can then choose your volume size and finalise the cost.
Packaging is flexible. You can send your own packaging to Australian Private Label for the team to fill, select from their packaging options, or have products shipped in bulk directly to you. Whatever your preference, it’s easy to work toward an arrangement that suits you.
You should now have a good understanding of what private labelling means and what it can bring to the table for all kinds of brand types. As selling private label products has lots of advantages, it could be the next step for your business, depending on your commercial circumstances.
Selling products helps to improve your earnings and gain an edge over the competition. Putting your own brand name to a physical item is thrilling, so if you’re interested in the idea, make sure you do your research and work with a private label goods company that has your brand’s best interests at heart.