How To Start A Private Label Business

Private labeling has become a big business opportunity, which has many advantages for profitability, as well as customers.

It is a very competitive marketplace, meaning you need the knowledge, resources, and grit to succeed. With that said, the world is your oyster, and starting a private label business can be extremely worthwhile, even with the challenges. 

what is private labeling?

Private labeling, by definition, is when you put your logo or brand on a generic product, made by a third-party manufacturer. This differentiates you from competitors and allows you to build brand loyalty and brand presence in the marketplace.

Research shows that 98% of people purchase at least 1 private-label product. The products are usually less expensive, and sometimes better quality than the big brands. 

Private labeling takes the product development portion out of starting a business from scratch, which has advantages. In addition, the advantages include having control over pricing, production, branding, and marketing.

The disadvantages include a lack of loyalty with consumers, customer perceptions of the brand, and lack of control in manufacturing processes. Regardless of the challenges, there are many more benefits to private labeling. 

how to get started

Let’s break it down into manageable steps to go from scratch to private label!

Understand the costs of private labeling. It is more expensive than you would think and usually requires a capital investment.

Be prepared to make an initial investment (roughly $1,500 or more), which will generally lead to bigger returns in the future. Ordering samples, putting logistics in place, and building a website can all add up significantly too.

The costs involved will include manufacturing, branding, and marketing. It will be completely up to you to market your brand for awareness to enhance sales.

Choose the products you want to sell. These products will be how you make your money. Usually, it is best to start with one prime product, before launching multiple products. This product should be high-margin and lightweight to reduce warehouse and shipping costs.

If the product does not do well, you can always substitute a second product. In addition, it is best to expand within the same family of products.

For example, if your product is in air care, like candles, you may want to expand to warmers, room sprays, wax melts, etc… This will also enable your website to focus on complimentary products.

define your target customer

It is important to clearly define who your typical customer is so that you can refine your marketing messages to focus on your potential buyer. 

make yourself stand out

Offer something unique that differs from the competition. Having a niche product will enable you to position your brand. Your brand is a combination of your product, market, and differentiating factor.

create a memorable experience

Build a unique brand that your customers will remember, relate to, and keep returning to buy from. You want your brand to be top of mind when customers think about your product.

You want them to have good vibes and emotions that make them want to return to your brand. Content, experiences, and relationships will enable the customer to become a loyal fan, instead of a one-time purchase.

find a strong supplier

You want to work with someone who has experience with private-label manufacturing, so they can help you make a profit. Also, immediately order samples for yourself to see if the product and quality are something you feel comfortable promoting to your audience.

Ensure the standards and expectations are in line with your vision before moving further. There are so many suppliers to choose from, so use your due diligence to pick the best suited for you.

build a strong brand

You'll need to copyright your name and logo, set up your website, create your social media accounts, and set up an LLC.

Your e-commerce business needs protection just the same as a storefront does. You will want to take the necessary steps to protect yourself, your products, and your profitability.

set up an online store or utilize amazon

Be sure to input your products with keyword-rich product descriptions and high-quality photos. After all your hard work and perseverance, you're ready to launch and market your store!!

 Starting your private label brand allows you to work directly with the manufacturer and create the products you desire, with your logo and branding. You are on your way to a new chapter of challenges, growth, and profitability.