How and why should you have private label products manufactured?

More and more e-commerce entrepreneurs are making the switch to private labelling. And they are certainly not doing so simply because it has become a popular trend. In practice, it has proven to be one of the best ways to distinguish yourself from the competition.

At Redjumla, we are happy to explain why.

Why private labelling is so popular

When you choose private labelling, you ask a factory to manufacture an existing product under your own brand name and with your own unique packaging. In some cases, it is even possible to add small variations, such as a different colour.

More extensive customisations and unique product specifications generally fall under a more advanced OEM or ODM process.

It is therefore no surprise that private labelling has become increasingly popular in recent years. This is partly due to the following reasons:

#1: You escape the price war

Are you selling a generic product that is also offered by another 20 sellers? Then you will almost automatically end up competing on price. And quite often, price alone. Customers quickly check which seller is the cheapest and then choose that option. In the long term, this is never going to result in a truly future-proof business.

Private label products largely allow you to avoid this problem. Your product has its own distinctive brand name and comes in custom packaging.

Would you like to create even more exclusivity? Then you can look at unique product specifications, custom tooling or moulds, intellectual property and specific agreements with the manufacturer.

#2: Higher margins are within reach

This second point is one of the main reasons why entrepreneurs make the switch to a private label. With private labelling, you work directly with the factory, without intermediaries taking a share of your margins.

It is also much easier to charge a slightly higher price when customers know they are purchasing a high-quality, branded product.

#3: You build something valuable

When you sell an unbranded product, you are not really building anything for the long term. If the factory stops producing it or a competitor appears with exactly the same item, you are left with nothing.

With a private label, you build your own brand for the future. When done properly, your brand as a whole can become more valuable year after year.

It may even result in a nice return if you eventually decide to sell your business.

#4: More control

Working with one of the many private label manufacturers also offers another advantage: you have more control over what the final product looks like.

This may include the colours, the packaging and potentially even certain additional product specifications.

You should, however, always take the following matters into account:

• Minimum Order Quantity (MOQ)
• Technical feasibility
• Ownership of designs and moulds
• Laws and regulations
• The factory’s capabilities and limitations

As the client, you will therefore not always have complete and unrestricted control over the products or the production process. But you will still have considerably more control than you would have when simply reselling an existing product.

There are certainly enough reasons to take private labelling seriously today.

How to establish your own private label in five steps

Are you fairly convinced of the benefits of this approach by now? Great, because it is time to move on to the practical side of things. This is where the idea really begins to take shape.

Step 1: Conduct thorough market research

Before you begin developing the product itself, you first need to understand the current state of the market you intend to enter.

For example, you need to determine whether there is actually any demand for your idea. What are the search volumes like? How many established competitors are there? And what are the reviews of comparable products saying?

Pay particular attention to the issues customers complain about most frequently. These pain points can become valuable opportunities if you know how to respond to them effectively.

Step 2: Find a suitable factory

The next step is to find a suitable factory. Keep in mind that not every factory offers private labelling.

Some private label manufacturers specialise in smaller quantities with extensive customisation, while others are set up purely for mass production and highly competitive pricing.

Always ask about their experience with similar products and request a general outline of how they intend to approach the project.

Step 3: Choose your product specifications

This is the point where you begin to make the product truly yours. Think carefully about materials, colours, dimensions and specific functionalities.

Document everything as clearly and precisely as possible. Vague agreements almost always lead to disappointment when the first production batch arrives.

Step 4: Test several samples

Never skip the sample-testing stage, no matter how tempting it may be to move forward immediately and place a large order.

Always request several samples first, test them thoroughly and potentially ask a number of prospective customers to evaluate them as well.

Only move on to the next step once you are completely satisfied and all product specifications have been finalised.

Step 5: Arrange the packaging and branding

Finally, everything comes together in the last step. This is where your private label is truly born. You decide what the packaging should look like and which story you want your brand to tell.

You should also arrange an independent quality inspection before the shipment is dispatched. This final step may well be the most important of all. As many e-commerce entrepreneurs will confirm, a beautiful brand with a poor-quality product will quickly fail.

At Redjumla, we often see entrepreneurs become extremely enthusiastic about starting a private label, only to run into difficulties once they have to find suitable manufacturers themselves. Communication becomes difficult, minimum order quantities are disappointing or the quality varies considerably from one production batch to another.

That is precisely why it is advisable to go through this process with an experienced partner. At Redjumla, we take the lead throughout the entire journey from A to Z, so you do not have to discover every potential pitfall yourself.

Thanks to our experience, our partners entrust the complete sourcing of their private label products to us. Throughout the process, you remain closely involved in matters such as product specifications, desired customisations and the design of manuals and packaging.

Contact us today for an introductory consultation without obligation!

FAQ

What is the difference between a private label and a white label?

With a private label, a product is manufactured for your brand according to your own specifications. White label products, on the other hand, are sold by multiple sellers under their own brand names without any product modifications.

A private label therefore gives you more opportunities to distinguish yourself.

How much does it cost to have private label products manufactured?

The cost of having private label products manufactured varies significantly depending on the product. Factors include the materials, the complexity of the product and the number of units you order at once.

What is the minimum number of units you need to order for private labelling?

The minimum number of units required for private labelling depends entirely on the factory and the type of product.

In most cases, you can expect a minimum order quantity ranging from several hundred to a few thousand units. Some private label manufacturers are more flexible than others, so it is certainly wise to compare them carefully beforehand.

Is private labelling suitable for new entrepreneurs?

Yes, private labelling can be suitable for new entrepreneurs. However, it is important to prepare properly.

Start with a product for which there is already proven demand, work with a reliable factory and never skip the process of requesting samples and testing the product’s quality.