How to create a successful private label product line

Private labeling is a business strategy that involves selling products that are manufactured by another company but branded and marketed as your own. It allows you to have more control over the quality of your products and create a unique identity for your brand without having to invest in the manufacturing process.

Private labeling can be used in many different industries, from food and beverage to apparel and technology. Many home decor brands use private labeling when they create collections – either as the only strategy or combined with ODM collections.

With private labeling, your company can focus on marketing your product with your own branding, and add additional products to your collections, while still taking advantage of the cost savings associated with outsourcing production.

Private labeling vs OEM

Original Equipment Manufacturers (OEM) sell highly customized products designed to suit a client’s specifications. If you want fully customized products, then OEM is the right choice for you.

A private label product is often a ready-made product where the brand owner can make some adjustments, but the differentiator comes from using the brand’s logo on the products.

Using a private label manufacturer when creating your collections, you can save a considerable amount of time and money. Instead of designing and developing products that you hope will sell, you can take advantage of private label manufacturers and invest in goods ready to sell with your branding added.

Private Label Definition: What Does Private Label Mean? — Private labeling vs OEM – which one is the right for you?

Should your brand offer its own labeled products?

Private label products are often popular among consumers. They have seen similar items in other collections, and therefore want to buy the products once they see your brand carry the same products or styles. Of course, you need to consider that other brands will most likely have similar products in their collections.

If you want your products to be very customized and different from anything else in the market, maybe private labeling is not your choice. Then again, with the speed of brands copying each other being so massive, it’s very difficult to have completely unique designs, unfortunately.

When I launched my new collection at a tradeshow in Stockholm, I noticed that a large importer had already managed to copy our patterned cushions and was offering them at a low-cost price in the hall next to the premium brand exhibition where my brand had a booth. It was such a shock, but something that happens in the design space all the time.

Advantages of a private label product line

There are both advantages and disadvantages of private labeling for products that are developed and sold by the company that produces them. The advantages of private labeling may include the following:

No, or very little, manufacturing experience required: your chosen manufacturers know how it works and you can let them guide you to get started.
You can get product fast. Manufacturers often carry a stock of the products so they can send you product samples quickly.
Smaller customization possible: while this model is not as customized as OEM, you can still ask for some customization. You can often change colors, materials, and other elements to create bespoke designs.
If you have your own store that carries many brands, you will have bigger profit margins if you sell private label products. You can also offer your private label products wholesale. Also, you will build customer loyalty if your store is the only place where they can buy your products!

Disadvantages of a private label product line

Not as many customization possibilities as when you decide to go OEM.
Other brands might carry similar, or the same, items.
Minimum quantities are often not tiny. You need to order a stock, but this is often smaller than if you’d decide to go the OEM route. Of course, both models have manufacturers who work with very small quantities, you just need to find them and build a relationship with them!
Quality might vary: in many cases, the quality control is not as accurate as it is with OEM products.

Your strategy depends on your vision and goals

If you are building a brand and developing your brand’s unique DNA, private labeling may not be the best choice for you. With private labeling, your brand won’t receive the same credit for the products you choose to sell, compared to OEM.

A great mix of OEM and private label

Many brand mix OEM and private label products successfully They might create flagship designs as OEM, and then add additional products to fill the gaps, and increase profits.

In my collection, all my originally designed patterned products such as cushion covers and blankets were OEM products, and we also had gorgeous faux fur and cable knit blankets with our label, but not specifically manufactured for us.

How do I come up with product ideas?

If you have no design ready yet but want to add a privately labeled product, the best places to start looking for products are tradeshows and online marketplaces.

Alibaba.com is the largest online marketplace for privately labeled goods, and daily easy to use. You can also browse through your competitors’ products, particularly if your competitors are selling products in different markets than you.

What products are often sold under a private label?

Private labeled goods are found in all sectors and types of products from food and skin care to decor and clothing. There will be products suitable for your market too!

How does private labeling work?

It’s fairly easy to launch a private label collection. I would start with a few products that match your brand aesthetics – either your OEM collection or your services if you already have some. If you have none of them, you can still launch a private label product line as your only business.

Finding products and manufacturers

As mentioned earlier, Alibaba.com is the largest marketplace for manufacturers, mostly in China, but also from all over the world. That’s a great place to start, you can browse collections online and make orders directly online.

When you browse the products available, you might get a small surprise when you realize how many of the products that you see in your favorite brands’ collections actually are available for your brand too.

Keep focused on your brand and what kind of products you want, and try not to get overwhelmed by all the possibilities. When you grow, you can start adding multiple products, but if this is your first time, just focus on the items you want to start with!

Finding private label products and manufacturers at Alibaba.com

Tradeshows are another great place to find manufacturers! I found the best manufacturers at Heimtextil in Germany.

Here’s a great source for finding private labeling companies: Private Label Manufacturers Association, and here’s their Annual Trade Show.

Choosing the right private label manufacturer

How to choose the right manufacturer? This is difficult because regardless of what you choose, you will most likely meet some challenges along the way. Product manufacturers are great, and producing your goods overseas is simple, but it doesn’t come without challenges.

Then again, business is filled with challenges, and that’s what we entrepreneurs are made to do: solve challenges, right?

Do you get an answer to your queries? If yes, that’s a good sign. If not, move on.
Do they have well-documented processes available?
Are they helpful?
Do they work with small businesses (if your business is small, i.e. your first orders are small)?
Do you find them trustworthy?

Understanding the logistics of private labeling

Understanding logistics is equally important regardless of your chosen manufacturing model, so I’m adding a complete guide for logistics for you to read. In that article, we cover:

minimum order quantities
shipping and delivery details
3PL warehouses and tools for inventory management

So, should you launch a private label product line?

Maybe, if that is what you want to sell. It’s definitely an easier option than going into OEM directly, but if you have unique designs, you do better if you choose the OEM route!

This article is presented by Avenue – a boutique consulting and coaching company helping design + wellbeing professionals and brands grow, scale, and go international. Read more about our program and consulting
SHOP OUR TOOLS FOR DESIGN ENTREPRENEURS