Private label products, otherwise known as white label products, are made by a third-party company to be branded and sold by another company as their own. Common private label products include cosmetics, clothing, and condiments. Many large retailers use private labeling to sell products using their own store-exclusive brand that competes with similar well-recognized brands. Private labeling simplifies the product development process and can give brands more control over their products, but how does it work, and what are the benefits?
How Does Private Labeling Work?
Private labeling allows brands and retailers to outsource product procurement and manufacturing to a third-party company. Once the product is ready to sell, the retailers can then apply their own branding to the packaging. While most consumers are unaware of this practice, it is very popular in today’s shopping environment.
Private label manufacturers identify brands or individuals to secure deals with, and the brand sells the developed products without any attribution to the manufacturer. Companies may choose to sell the private labeled products alone or within a product line.
Almost every consumer product category uses private labeling, including:
- Cosmetics
- Personal care products
- Dairy items
- Frozen foods
- Condiments and salad dressings
- Beverages
- Paper products
- Household cleaners
A recent Nielsen Report shows that certain private label categories are growing strong, so it could be a great time for your brand to benefit from using this practice.
Top Benefits of Private Labeling
As with any business model, private labeling has its advantages and disadvantages. Some of the top benefits of private labeling include:
Loyalty
Having a loyal customer base is key to building a successful long-term business, and private labeling helps brands build customer loyalty by providing the products they want. When customers become attached to a brand, they are more likely to trust new products they offer, which increases profits and loyalty among a brand’s customer base.
Adaptability
Private labeling allows brands to react more quickly to meet rising market demand when customers desire new features. The adaptability of private labeling allows smaller brands to take advantage of niche products that larger companies may not be interested in pursuing or would take longer to source and produce.
High Margins
Since it is generally cheaper to make your own than resale premade products, private labeling allows brands to enjoy higher profit margins than resellers.
Wholesale Income
While private labeling allows the exclusivity to sell a product, brands can earn additional income by offering limited access for other retailers to carry their product at a premium acquisition cost. The wholesale income is beneficial for a brand’s bottom line and for expanding the exposure of its brand without excessive marketing efforts.
Exclusivity
One of the main benefits of private label products is most brands often get the exclusive right to sell the product. Private labeling is an opportunity for a brand to separate itself from the competition by leveraging the exclusivity of its product.
Integral Products Private Labeling Capabilities
Private labeling is an excellent choice for companies interested in expanding their product offerings to meet the needs of their established customer base. When choosing a private label manufacturer, it’s important to understand your target market and how the manufacturer can efficiently create a product that connects with your desired customer. You also want to work with a manufacturer who understands the vision for your product and focuses on quality and brand satisfaction.
As the industry leader in private labeling and product branding, Integral Products works with you to achieve brand recognition by establishing an identity for your products. We do more than just put a logo on a label. Our Custom Packaging Department assists in supplying your product in a variety of sizes and kits to meet your unique needs and customer demands. We review all aspects of your product, from packaging and labeling to technical support and quality control, offering some of the fastest turnaround times while meeting the highest industry standards.
Contact us to learn how we can help with your private labeling needs or request information about our services today.