What is Private Label & Understanding Private Label Development

The Definition of Private Label

A private label is any goods sold under a specific retailer, often competing with other brand-name goods. Private label products tend to be less expensive than their brand-name counterparts. Retailers, such as supermarkets, often have better room for a higher profit margin by offering both branded and private label products.

Advantages of Private Label

In this next section, we discuss the benefits of private labeling. These tips will be helpful to know if you wish to launch your own private label product line.

Adaptability to Global Markets

Most retailers depend on suppliers to meet their supply needs, making adjusting and reacting to market demands tricky. If there's a sudden increase in the demand for a product, or the need takes a sudden dip, it's the supplier who has to adapt to these changes. Being speedy during this process is very difficult.

However, things become more agile when a retailer controls the manufacturing process. Retailers can react swiftly to shifting behaviors. It takes a simple call or email to inform the manufacturer to tweak the manufacturing. 

Complete Control Over Production

Another area where private labeling gives retailers more control is production. The retailers get to control and govern all aspects of the manufacturing process. They can insist upon details like the shape or packaging's color. 

More Control Over Pricing

Since retailers control the entire supply chain, they also get to control and decide the production costs. As such, they can come up with more profitable pricing. The whole production happens in a way that ensures the healthiest profit margin. 

Oversight of Branding Products

The thing about branded products is that consumers eventually love the makers and not the actual company that came up with the product idea and distribution channels. However, retailers get to enjoy branding and customer loyalty with private labels.

Sourcing & Developing Private Label Products

A large amount of brainpower goes into coming up with a private label product idea and the final creation process. With that said, below are some things that should help with the product creation and sourcing:

Figure Out What You Want to Sell

The first step is to always explore multiple niches within the desired categories. This should help with establishing the exact kind of product to sell. Selling to a niche market allows for better marketing, more fruitful advertising, and branding strategies. 

Connect With the Manufacturer

After figuring out what to sell, the next step is to contact suppliers and manufacturers willing to create those products. Websites like Alibaba, Oberlo, and simple Google Search are great ways to get in touch with them.

At this stage, it's crucial to look at the supplier's legitimacy and whether or not they carry a minimum order requirement. Product sampling is another thing to perform at this stage.

Set up a Store

After coming up with a product prototype and a manufacturer, the next order of business is to set up an online store. With websites like Shopify, this is super easy. The platform allows the creation of both free and paid eCommerce stores. 

Adding the Product to the Store

When adding your product to a storefront or supermarket, here are a few essential things to do:

  • Write a clear product description. The description should be benefit-oriented, compelling, and informative. Avoid focusing only on specs and features.
  • Produce or hire a photographer to take high-quality product images. They tell customers what the product looks like and could be used across various tangible and digital touchpoints.
  • Set your pricing strategy. Set the price high enough to make a profit and low enough that the customers can buy it.

Launch/Market the Store

Launching a private label product is not as simple as flipping a switch. There must be awareness around the products and website, and new stores can use paid advertising channels like Facebook, Instagram, and Google. There's email marketing, content marketing, social media, customer loyalty programs, and SEO. Marketing your product is always vital before launching into a store.

Private Label Growth in 2022 & Beyond

Placer.ai released a report surrounding retail foot traffic. The report forecasted what's new for the retail market in 2022 and beyond. 

The retail forecast suggested that due to the pandemic and the ongoing challenges that the pandemic has posed, uncertainties could both be challenging and an opportunity for private label products.

The white paper focused on various retailers that maintain a private label collection like Sephora, Target, Walmart, and Ulta. It analyzed a promising growth for retail stores across healthcare and food products. 

Finding a Private Label Developer & Trading Company like ATI

Finding the right private label developer could make or break the business. It could also help get the company started on the right foot.

ATI or American Trading Company has developed over 30 private labels over 26+ years. It handles everything from logistics, warehouse, paperwork, dealing with key industry players, branding, and everything in between.

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