Top 20 Benefits to Using a Private Label Brand

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Top 20 Benefits to Using a Private Label Brand

In the past we’ve written a lot about the different private label products out there. For example – different oils and cosmetic private label products. We’ve also written about some of the great benefits of private label brands. Here we have assembled 20 of some of the most superb benefits of using a Private Label Brand – from big to small, there’s no shortage of Private Label benefits to take advantage of!

What is a Private Label Brand?

Before we go through our top 20 benefits of private label branding, let’s recap: What exactly are private label brands in the first place?

When we say “private label brand” or “phantom brand,” we are referring to products that are typically manufactured or provided by one company for offer under another company’s brand. For example, let’s say Jake’s Granola Bars, produced by Jake’s Company, becomes the store brand for the local supermarket chain in Central City. In that instance, Jake’s Company is acting as a private label provider. Private label branding reaches a wide range of industries including food, cosmetics, and web hosting. Now, let’s get started with our top-20 list!

20 Benefits of a Private Label Brand

  1. Private Label products are manufactured exclusively for the wholesaler and therefore, don’t need to compete head on with name brands.
  2. Private Labeling involves direct involvement with suppliers and sources – a boon to business logistics and day-to-day operations.
  3. Using a Private Label company allows you to create your own unique marketing mix with ease. This helps you promote a stronger market presence, which will assuredly resonate with consumers.
  4. Going with a Private Label manufacturer will give you control over marketing, pricing, sales, and distribution – without the headache of having to do everything. Win-win.
  5. Private Labels and packaging are designed to meet private labels owners specified requirements, including the products name, company logo, product description, and contact info.
  6. Store brand sales tend to be more profitable than national brand sales because the products are cheaper to manufacture.
  7. Private Labeling gives retailers the opportunity to provide styles customers are looking for ASAP. As soon as a trend or marketing development occurs, Private Labels are ready to customize and provide.
  8. Private Label products can be wholly unique and specially developed. This means that consumers can’t simply visit some other website or store and find the same product(s).
  9. Private Labeling pressures big-name manufacturers, applying pressure in terms of value and pricing.
  10. Private Labeling can have higher margins. Private label brands tend to have significantly higher profit margins than resale products. This is even more likely if you are successful in developing and marketing high quality products which are competitively priced in the marketplace. For example, supermarkets tend to use private labels to fetch strong profit margins that offset slight gains for top industry brands with high costs.
  11. Exclusivity. Private label branding follows the philosophy that if you market your brand well and create demand for it, you will become the go-to source for that product in the eyes of consumers. Once established, Private Label users have the ability to charge premium prices if they choose to take that approach. Once a loyal following is cultivated – anything is possible.
  12. One of the most integral aspects of establishing a successful business is making sure you can maintain a loyal customer base. Private label branding happens to be a proven way to build a loyal customer base. Due to the vast customization options, you can tailor your product and packaging to whatever specifications you think will best attract customers.
  13. Once your brand is established through Private Labeling, you have the option to sell your successful products to other companies via wholesale. Additional revenue streams are always welcome.
  14. Private Labeling is generally more cost effective. Private label products tend to be significantly less expensive than their national brand competition. Statistics have shown that private label products tend to cost around 30% less than national brands. The lower cost is achievable thanks to a few different factors. First of all, when buying from private label brands, customers don’t need to pay for the same mass marketing campaigns or other costs typical of national brands. Local products that come from local producers also inevitably have lesser transportation costs.
  15. Even the more expensive Private Label products offer superior value. This is because the markup generally occurs thanks to superior formulation and development.
  16. Private Label companies work with consumers towards creating the most effective brand and image possible. This is helpful in a number of ways, but most importantly – two heads are better than one. Seasoned professionals who are capable of offering input or taking the lead on everything from labeling, taglines, and logos could prove to be invaluable. Branding is absolutely vital when it comes to selling any sort of product, and Private Labeling makes branding a whole lot simpler.
  17. Thanks to the free-flowing and dynamic nature of Private Labeling, things can be changed on the fly. No Private Label product will be beholden to any particular decision – if something isn’t working it can be changed, and if something is working it can be done on a greater scale and enhanced. That’s the beauty of Private Labeling – you get what you want, when you want it.
  18. Private Labeling is bigger than ever. Customers are more savvy than most give them credit for and are capable of recognizing the superior quality offered by Private Label brands. Some customers these days even have an aversion to supporting big-name brand manufacturers and seek out smaller, safer companies that provide quality products. Private Label brands fill that niche.
  19. The emergence of new channels to distribute Private Label products. In the past, warehouse clubs and other distributors being opened to private label brands was heavily scarce. These days, this is no longer the case. Mass merchandisers have begun to pick up brands because they are seeking the potential associated with them. This has led to the establishment of new product categories, general trends, and overall product diversity for consumers. That’s not all Private Label products being sold through a broader audience has led to, though. Private Label products having a stronger presence has given consumers a stronger sense of product security than ever before.
  20. Private Label brands are going National. For example, one North American brand of cookies was recorded as selling over 1,500 different types of products all over the country. Private label brands being so successful in national sales demonstrates the true potential of these operations, which are usually thought of as small time.

Conclusion

Well, there you have it. These 20 unique benefits of Private Label products represent some of the best reasons for small business owners to go Private Label. If you’re a small business owner, it behooves you to do your due diligence and find out all that you can about Private Labeling. If you’ve been struggling with sales or getting your brand off the ground, it could be the answer you’ve been looking for.

Thanks for checking out Innovative Private Label! Be sure to read some of our other features – like our Private Label and Skin Care, Arbitrage vs. Private Label, and Benefits of Beard Oil features!

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