What is Private Label Branding and How Does it Work

Whether in-store, Mall, Market, or online, most retailers/sellers obtain their products from suppliers. Many brands do not manufacture and sell their skincare lines directly to consumers.

Unlike sellers of video conferencing solutions or other software service providers, most of the brands don't sell products under their own name or branding unless they invest in private label products. If you're not familiar with or understand the term private label, you need to read on. We'll go through what these products are, their most notable pros and cons, and how to use them to your advantage. 

Private Label Products

Private Label Products are produced by Third-Party manufacturers and sold under the retailer’s brand name. As the retailer/brand owner you have the total rights or control over the product's specifications – what goes in it, design, packaging, formulations, and pay to have it manufactured and distributed to your offline and online store.

Private labels are one of the tools to build competitive advantage through creating cost leadership. In building customer relationships, the Private labels provide a win-win solution. The retailers gain better bargaining (bargaining cost) power over their suppliers and better margins while the customers get a wider choice of prices.

Benefits of Private Label

Private Labeling is increasingly common in many niches. The practice holds a lot of advantages for retailers, whether large or small startups like parlors, stores. These are the most common benefits:

Adaptability

Some retailers or brand owners depend on suppliers for all their products. Consequently, they depend on said suppliers to counter market demand. If your customers want new lines, new features or new formulations to an already existing product, it's the suppliers who must adapt to these changes. This process can prove excruciatingly slow.

Production Control

The practice of private labeling allows retailers to be in charge of the entire supply chain. They establish and control production expenses to ensure the most profitable pricing and help the process of competitor pricing strategy. Products get made in a way that guarantees the best final margins.

Branding Control

The issue with branded products is that it’s not your brand that the customer love. They will be loyal to the creators of their favorite items, not the acting distributors. On the other hand, private label products bear your brand name and branding on the package.

Disadvantages of Private Labeling

While private labeling has many advantages, there's also one notable potential disadvantage.

Difficulty Raising Brand Loyalty

Putting your brand name on the product is an excellent idea in theory. In reality, however, it can be challenging to build/create meaningful brand loyalty or value. Yes, they are your products, and you have control over what goes into them, but you still have to compete with settled names in the space.

Those well-established brands hold some main advantages over your relatively new private-label skincare line. For starters, they are going to be available on many more shelves in a lot more stores, shops & malls. Last but not least, these brands have a far vaster budget to promote/grow their products.

Choosing Your Private Label Manufacturer

Before committing to a private label manufacturer. Conduct research on your target customers so that you are accustomed to their buying patterns. That way, you can develop/build the most suitable proposal for private-label brands. Frequent networking events, trade shows, make connections, and scale the competition.

When choosing which private label manufacturer to partner with, many brands or individual sellers go for an online portal. However, you should always consider other manufacturers specific to your offerings. For example, ALLMASK.

Conclusion

Even if you are an online or offline retailer, private labeling is open to everyone. Private labeling is where the retailer has products made to sell under its brand name - they have total control of production like formulations, variants, fragrances, pricing, and branding.