What does private label mean?
Briefly, private label is used to describe products that are manufactured by one company but labeled and sold under another one’s brand name. Private label products are available in a wide range of sectors from food to cosmetics.
The number of private label products manufactured and sold has remarkably increased for the past few years. But it doesn’t mean that kickstarting the private label business is easy. Below are what sellers should do before getting started:
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1. Conduct market research
What type of products are customers dying to look for?
To answer this question, retailers should try to conduct some market research on customer demands, market competition, and product sources. Then, carefully analyze the results and collect the most insightful ideas. However, in addition, to assess market demand, retailers should consider selling products that they already have understandings.
Find label manufacturers
Finding a reliable manufacturer of private label products can take days. If retailers are new to the market, they should come to experienced retailers and ask for advice. In addition, retailers can use Alibaba or AliExpress product categories. Also, doing market research is recommended, but they should verify sources beforehand and stay away from PR/fake news articles.
What to do next after you found some potential names? What to look for?
2. Shipping costs and times, Minimum order quantity (MOQ)
After retailers found some potential names, there are several things they should consider, such as shipping costs and times, and minimum order quantity.
In fact, customers are not willing to pay too much and wait for weeks to receive their parcels at all. So, opt for manufacturers who ensure that delivery costs and times are acceptable. Directly contact manufacturers to get this information.
Besides, MOQ is important as it can significantly affect the overall cost of the products. Thus, retailers have to make sure that a) they need that specific quantity, and b) they can cover the cost and still have high-profit margins.
