The Opportunity of Private Labeling

I was having breakfast at a nearby restaurant last week when I noticed available there is a bottle of hot sauce with the restaurant's name on it. I was impressed because I knew this was no chain - it is just a small independent restaurant who had been using private labeling. It is among an increasing quantity of small restaurants that enhance their brand by putting their very own name on products. 

First, let's be clear by what I mean by Private Labeling. Based on Wikipedia, the internet encyclopedia, private label products or services are generally those manufactured or supplied by one company for offer under another company's brand. Which means this covers from Wal-Mart brand products to the tiny restaurant putting their label on someone else's hot sauce.

It is amazing the amount of businesses now which are engaged in some form of private labeling. Restaurants, hotels, spas, hair salons, even car dealers are putting their own brand on products such as for instance hot sauce, lotions, shampoos, coffee, lip balm, bottled water and wine. Many corporations want to place their own logo on products they giveaway to strengthen their brand. The corporate gift market is particularly busy around Christmas. There are also many small businesses that are looking to look more professional by having their very own brand of products to market - coffee and bottled water are particularly popular here.

Getting Started

In order manufacturer how do you begin selling your product via private label? The simplest way is always to just start selling to other local companies. If you sell coffee then begin with the local cafés and donut shops - many companies are happy to aid other local companies, specially if they could get their very own brand on the products. Obviously, your existing customer base would also be a good destination for a start. You can offer to place their name and logo on labels that go on your own product.

When you have a couple of private label customers then you're able to start a formal "Private Label Program" giving prospects examples of what other individuals have done. One important point to see would be to be sure to make it as easy as possible for your customers. You must offer to complete all the task for them including the labeling, so they'll just have the finished product. You might find yourself having lower margins in your private label products, but you may make up for that with increased volume.

You don't want to do it alone in your private label venture; there are plenty of resources out there to help you. You will find two main publications as you are able to read: