You must have heard about private-label supplements or private-label wine, or just about any product attached to private labeling. For many, the term private labeling is just another term for manufacturing. However, there is a distinct difference between private labeling and manufacturing. Whereas manufacturing simply means creating a product from scratch, private labeling allows a business to create its products and brands.
Although this can be achieved in a multitude of ways, the commonest form is contract manufacturing. Private labeling is preferred by many businesses because it helps in developing unique products without investing in manufacturing facilities or spending on the salaries of hired staff. The quality of the product is never compromised in private labeling.
How Does Private Labeling Work?
Private labeling can be achieved in many ways. However, the most common way is through contract manufacturing. Businesses work with manufacturing units in this model to produce the products in question. The manufacturer is given specifications by the business for producing the products they have in question. Once the manufacturing is complete, the products are then shipped to the company, where the branding and the labels are attached for completion.
What would be the Key Benefits of Private Labeling?
Some of the key advantages of resorting to a private labeling model include:
1. Private labeling does allow businesses to curate their products since they have complete control over every part and every aspect of the manufacturing process. This includes choosing the ingredients for manufacturing, deciding on the percentages required to choosing the materials used for branding as well as packaging. There is a scope for contributing to every aspect of the manufacturing process. This encourages exclusivity in brand manufacturing.
2. Private labeling helps in building a very strong relationship with clients. This is because the products created with the help of this model are unique. And when you can create products that cater to the specific requirements of customers, they are likely to remain extremely loyal to your business.
3. It is essentially a money-saving model. When you opt for private labeling, you are saving costs on setting up manufacturing facilities, infrastructure, staff, and so on. Therefore, in most cases, you should be able to pass on the advantages to your customers. This works like a win-win situation for all. You end up saving money at your end, and you can pass on some of the advantages to your loyal customers. As a result, you also stand a chance to enhance business prospects owing to the price advantage you provide.
Private Labeling: Some Considerations to Keep in Mind
Some considerations to keep in mind when choosing a private labeling partner include:
1) There might be concerns over control of the manufacturing process: When businesses are engaged to work with a manufacturer for producing their products they would have lesser control over the manufacturing process. Such concerns may be suitably addressed by engaging the services of a reputed private label manufacturing company. When the manufacturing company is of repute, a situation where the product might not meet the quality standards of the branding company would not arise. Therefore, this concern can be suitably addressed by choosing a private label manufacturer judiciously.
2) Some Concerns over Longer Lead Times would be Valid: There would be some concerns over longer lead times. When the manufacturing part is assigned to someone else, longer lead times may become a reality. Considering that the products would be manufactured at one facility and then shipped from there to another, delays can be considered common. Here again, choosing a manufacturing company that delivers on its promises will always help in managing these concerns better.
3) There could be concerns over higher minimum orders: Manufacturers of private labels may need to place large orders of products. This can pose a problem for small businesses that may not have space for storing large quantities of products. However, here again, choosing a company for private label chocolate supplements wisely will always help in ensuring flexibility in product orders.
Finding a reliable private label company, therefore, becomes of paramount importance to ensure that the deliveries are on time, the order quantities are suitable, and the manufacturing is done as per the desired guidelines.
Some of the Aspects to Check on Before Choosing a Private Label Manufacturer
Some of the aspects to look at include
The Quality of the Products: The quality of the products should be assessed first before zeroing in on any manufacturing company. Check on all relevant quality parameters and provide the desired feedback before the bulk manufacturing process can begin. Consider bulk ordering only if your requirements and specifications can be met. Unless there is a complete alignment of requirements with manufacturing standards, you should not go ahead with a professional alliance.
The Manufacturing Process: The process of manufacturing should always be in sync with the nature of the products you need. You should be able to dictate to the private label manufacturing company on the procedural requirements you have, and the company should abide by them. Remember, the products manufactured will be representing your brand name in the market. You need to be sure of how the products are being made.
The Lead time: Checking on the prevailing lead times of the manufacturers is equally important. What are the lead times they operate on? What are the volumes they manufacture within the given lead times? These are some of the questions you need to ask.
The Minimum Order Quantity: Most manufacturers will have a minimum order quantity to work on. You need to ensure that the quantity is suitable to your requirements. If the minimum quantity is too small, you might need multiple batches to fulfill your requirements. If the minimum quantity is too large, this may not be the most suitable manufacturer or supplier for your requirement. You need to perhaps look elsewhere.
The Price Point: Checking on the price points is just as important. Consider making the most of the discounts and bulk prices offered. Work out price points that would work for both of you. In case costs seem too much, you can simply look elsewhere