Private labeling entails manufacturers or suppliers producing various goods and outsourcing retailing, packaging, and selling to a third party. In turn, the manufacturer or supplier profits from selling their products to this third party, while the latter profits from selling these goods to consumers using their brand name. Private labeling is becoming increasingly popular in the retail industry as it allows retailers to market and sell their products without the hassle of manufacturing them in-house.
This blog post will cover the reasons why many companies use private labeling and the differences between private label vs. white label solutions.
Advantages of Private Labeling
Understandably, retailers want to fill their shelves with products displaying and promoting their brand. To achieve this, retailers frequently use private label products, which offer a variety of advantages, such as:
- Production Control: Retailers give specific directions to third-party manufacturers that adhere to them, allowing retailers complete control over the quality and ingredients of products.
- Pricing Control: Retailers benefit from the ability to precisely determine the product cost and pricing due to their complete control over the production of their products.
- Adaptability: If smaller retailers see an increase in market demand for a particular product or feature, private labeling offers the ability to quickly produce these goods. This gives them a competitive edge over larger retailers that may not be as invested in niche products.
- Branding Control: One of the biggest advantages of private labeling is that the retailer has their brand name and packaging design featured on each private label product, which helps build brand awareness and recognition with these products.
- Profit Control: Retailers have complete control over pricing and production costs, which means they can more effectively control the profitability of all their products.
Private Label vs. White Label
There are certain differences between private label and white label solutions that retailers should keep in mind when deciding between these two services, including:
Private labels offer more customization options for products. Manufacturers may produce a unique version of a product exclusive to a particular retailer, which enables retailers to sell more exclusive products that set them apart.
White label products, on the other hand, usually involve manufacturers selling the same basic product to every third-party retailer, preventing product customization. However, as a result, they don’t see extra labeling expenses.
With private label solutions, retailers send all of their product specifications to producers, which helps keep other competing retailers from selling the same or similar products.
For white label products, manufacturers and suppliers offer the same products to multiple sellers, making them less exclusive.
Private label products primarily consist of physical items, which manufacturers produce while retailers resell them. Private label products could include clothing, cosmetics, workout equipment, storage products, furniture, and many others.
Conversely, white-label products tend to be non-physical items such as software or services, which retailers then resell and relabel as their own.
Private Label Services from Jonco Industries
Private label solutions often provide more control, customization, and profitability to the retailer than white label solutions. However, if you want to benefit from private label solutions, it’s important to partner with the right company.
Since our establishment in 1980, Jonco Industries Inc. has worked to meet the needs of our clients with the best possible solutions. We help realize our clients’ unique vision and produce top-quality products. We connect our clients with a variety of designers, engineers, and craftsmen who are prepared to meet each of our clients’ specifications.
For more information about our private label services and other solutions that we offer, contact us today.