Private labeling is where you can engage a third-party manufacturer to create custom-made products that can be sold under your name, brand, or label. It is an extremely popular model that has been making headway in recent times. There are private label supplements, private label chocolates, private-label cosmetics, and just about anything and everything under the sun! If you are planning to start a private label business, here are some things to keep in mind.
Begin with a Market Quest
The very first step towards starting a private label manufacturing business is to look for a niche market to operate in. It is important to keep in mind that there is a great deal of competition. Therefore, the market you select for getting your business wheel moving is of extreme importance. You need to figure out specifically what you wish to sell and then explore the niche market categories within that segment.
For instance, if you have decided to sell cosmetics for instance, looking for segments like mousse for curly hair, grooming products for thick and thin beard lines, and so on would be ideal! You need to pick a niche that has not been done to death and holds the promise of a healthy market demand! When you sell within a niche market, marketing strategies and advertising strategies can be specifically targeted toward them. This automatically yields focused results.
You can always explore the online space for products or segments that are doing well currently and enjoying a healthy demand. Choose a handful of segments and zero in on the one you are most comfortable with.
Once you have decided on the segment you wish to operate in, the very next step would be to look for suppliers and manufacturers. You need to begin by short-listing manufacturers and contacting them to see if they are in for the private labeling model. If the response is in the affirmative, you need to inquire about setting up the account with them. Most manufacturers cater to a range or variety of products. Therefore, shortlisting will allow sourcing a handful of products quickly within the limits of the niche you have been concentrating on.
Before finalizing a manufacturer for your private labeling model, you need to ask if the manufacturer has a minimum value for the order. You will need to navigate accordingly if you wish to hold your stock. Alternatively, you can set up a prepaid account with your manufacturer. Sometimes, the minimum order value may prove to be too large for you, especially if you are starting small. You need to keep these factors in mind to work around your capital most profitably as possible.
Ensure Quality by Sampling
One flip side of the online market is that you are not able to touch and feel the product before ordering. And considering that this is bulk ordering, we are looking at, sampling and testing would be mandatory. Ask your manufacturer to send a handful of samples covering the different types of varieties that you have ordered. Check the samples carefully for product quality and other parameters before paying for the bulk order. Remember, the quality of the product is paramount! That on which your business is likely to thrive. Therefore, there should be no compromises while checking the quality of the product. Price points should be ideally decided only after one is sure of the product quality.
Setting up an Online Store to Sell
Once the manufacturer has been decided upon and the orders have been placed, you need an interface to showcase and sell your products. An online store should ideally be set up for the purpose. The store should be an attractive one with all the necessary features needed for easy navigation.
You can always seek professional help for setting up a store that makes heads turn. Add your complete product range to your store. Here are some of the steps to undertake to do product showcasing right:
- Penning down compelling product descriptions is important. Product descriptions should not be all flowery language. They should be factual to the core. You need to include information and benefits as compared to listing out specifications and features. More often, customers are concerned with finding out what’s in it for them rather than checking out high-class features.
- The product images you use on your online store need to be high quality. The photos are the only visual exposure your customer will get to the product without checking out the product in question. In some cases, the manufacturer can provide the images for you. If you choose your pictures, you need to be careful where you are sourcing them from.
- Determine the pricing strategy of the product. The price point should be such that it covers your costs and provides you with a decent profit, However, overpricing your product in a bid to fleece customers will do more harm than good. You might be able to make some money initially, however, it will not be possible to sustain the momentum. Customers will soon compare your price points with other sellers selling similar quality products and shy away.
Launching and Marketing
Once the store has been set up and established to perfection, you need to reveal the interface and the public-label products it is showcasing to the market. And this is not as simple as simple floating the store one day and sitting back and enjoying the results. This is nothing short of launching or inaugurating a new physical store. You will need awareness building and also ways to drive traffic to your website.
For fresh stores, there are paid channels for advertising on Facebook, Google as well as Instagram. You can also supplement these efforts with social media drives, content marketing, email marketing, customer loyalty programs, and Search Engine Optimization.
A lot has to be planned to get your private label model right. Make sure you pick your manufacturer wisely, strike a profitable deal with them and get your marketing and advertising initiatives right to make the most.