Private label means that you work with a manufacturer, tell him to create your product, and then that manufacturer will stamp your brand name on it, and then you sell it to your customers.
The difference between a private label product and white label is that for white label, you did not work on the formula of what you are selling. Basically, you just order products from one company and market them as yours.
Many big companies do private label business. If you go to big stores like Target, you will see that they have their own snack line. Although these snacks are labelled to be Target products, Target did not put up their own manufacturing plant.
So, why do they do this? Private label is a business process that is similar to outsourcing. It makes it easier to put up a business because you do not have to buy equipment, you do not have to spend years developing your product, and you do not have to go through the headache of manufacturing yourself.
White Label vs Private Label vs Wholesale
These three can be confusing so we will be providing you with the proper descriptions.
- White Label – a process where you buy someone’s product, and then you just brand it as your own. In this set-up, you have no control on the quality or the formula of the goods.
- Private Label – a process where you contact a manufacturer, and then ask this manufacturer to create products according to your instructions.
- Wholesale – this is a business model where you buy products in bulk, but they are already branded and all you need to do is to sell them on retail. For example, you can buy hundreds of Nike shoes at a discounted price, and then sell it on retail to make a profit.
So, now that you know the difference between the three, you need to develop your own product or work with a manufacturer who is already selling white label products, and then ask them to make changes according to your specifications.
How to Start a Private Label Product Business
If the internet didn't exist, you would have a hard time doing this business model. But since we already have it, setting up your private label business is easy. The first thing you need to do is to find a niche or an area that you are passionate about. Remember, a product that you sell is a product that you can defend. You must love this niche so you can talk about it, market it, and make sales.
Step 1: Make sure that your niche has a market
This is easier said than done. To find out if people are buying the product you are looking forward to selling, you need to use tools like Google Trends, or Google Adwords. With both tools, you will know what people are searching for in the whole world, per region, or per country.
In the screenshot above, you can see that there was big interest in rubber shoes in December of 2018. By August of 2019, the trend score is only at 75, which is still pretty high.
Step 2: Find out what products sell
Just because you want to be in the cosmetic business does not mean lipstick sells. It is possible that the foundation or make-up has higher sales than lipstick. Again, you need to spend a lot of time doing this research.
You need to invest in your research education, and then visit lots of social media channels and sites to find out if there is a buzz about a product such as yours.
One good site where you can find what sells is Jungle Scout. This site provides actual searches for specific products, and you will know if your product has a demand.
Related: Dropshipping For Beginners: The Simple Step By Step Guide To Starting
Step 3: Contact manufacturers
This is going to take a while, and you may be surprised at the rate at which manufacturers respond. The first thing you have to check is Alibaba, as this is the world’s hub of manufacturers and wholesalers that do private label.
Do not listen to what people say that Chinese manufacturers provide low-quality products. More than 25% of the world’s manufactured goods come from China, including smartphones and high-tech televisions. The thing is, you get what you pay for. High-quality products are much more expensive than cheap ones.
Contact manufacturers and be ready to provide your logo or design. Many manufacturers will ship a sample, but you have to pay for it. Also, samples are much more expensive than the actual product cost because they will be dedicating some time to create printing templates for your logo.
Step 4: Buy the samples
By this time, you should have contacted several manufacturers and you must have decided which among them is the best one to work with. It is time to pay for a sample and wait for the product to arrive.
Once you have the product sample, carefully check it for defects. Check the quality of the product, and the packaging, too. List down all these things and ask the manufacturer if he can fix them, and then get another sample.
Step 5: Create a business plan
While your manufacturer is finalizing the product, you must create your business plan. By now, you have the details about the cost, so you can create a plan how to make your business profitable.
The details you need are:
- Minimum order count
- Cost per product
- Other fees like printing templates for your logo
- Shipping fee
- Tax or Customs Duties
Once you have all these details, you can calculate how much each product really costs, and then you can start figuring out how much you need to sell them to make a profit. This, of course, includes some numbers that will cover your labor costs, shipping to the customer, website maintenance, and so much more.
Step 6: Start the business set-up
Once you are confident about your business plan, and after getting the final sample from the manufacturer, it is time to order them. Depending on the volume and location, the processing time can take a month or so to complete, including shipping.
While the manufacturer is busy, you can take the time to set up your website, and it is up to you to choose what platform to use like Shopify or BigCommerce or others. You need to create your shipping policy page, terms and conditions, About Us, and so much more. Building a website is a long process, especially if you want to do it right.
You also need to work on your marketing strategy during this period, such as what kind of ads you will run, on what platform, how long, for how much. Use this period to write blogs and do SEO, but do not publish them yet. Wait until your website is up and running and then publish the articles you prepared on a regular schedule.
Step 7: Business Launch
This is the part of the business that is the most exciting. You are now ready to take orders, release your marketing campaign, and ship orders to your customers. During the business launch, you need to take the orders, pack the orders, print labels, and ship them. Make sure you send a “thank you” note to your customers through email, or through a small piece of paper that is inside the package.
Step 8: Add more products
As you succeed in your selling, you have to make sure that you keep up with trending products. Just because you have sold lipsticks does not mean you need to stop there. Customers are likely to go back to your website if there are other options. Since you already have a manufacturer working with you, adding new products should not be that difficult anymore.
These eight steps will help you become successful, but only if done right. Do not be afraid to make mistakes, especially if the manufacturer you contacted delivered a bad product. Keep on searching and make sure you only sell high-quality private label products.
Related: The Ultimate Free Dropshipping Course!
31 Private Label Product Ideas
Let us review the 31 best types of private label products to help give you an idea of where to start. After discussing these 31 items, we will also provide you with some tips to help you succeed in your next $100,000 brand.
1. Water Bottle
A water bottle is a great place to start. There are so many designs and suppliers of water bottles, and there is a huge demand for it because people are now really conscious about how the use of plastic is damaging the oceans. You can market this with an emotional appeal to stop people from hurting the environment, and instead, use a water bottle that they can refill from water dispensers at home or in the office.
2. Essential oils
People who love to relax are your target market for this. Essential oils used to be branded as high-end products, but many people do not know that these oils are easily obtained at affordable prices. Oils can be used for body fragrances, candles, air deodorizer products, and bathtubs. It is completely up to you to decide what products you want to focus on or what market.
3. Woodworking tools
These are not machines but rather manual tools like saws, rulers, and others. Do not do a private label on electrical tools as you can get sued if something bad happens.
4. Phone accessories
Apart from phone cases, you can add chains, protective covers, chargers, USB ports, and so much more. If you decide to sell this, you have to create a cool packaging design, and you can work this out with your supplier. When it comes to phone accessories, your focus should be the packaging and marketing because these are emotional or impulse purchases.
5. E-Cigarettes
Those who love to smoke but do not want the diseases that come with it now have a healthy alternative. What you need to do is to create a brand and market the product in such a way that you can convince smokers that this is a healthy way to quit smoking.
6. Bags
If you sell bags, you need to decide on a niche. There are bags for women, kids, laptop bags, outdoor, and so much more. The kind of bag you choose must have a brand name that focuses on a single type of market. Start with one niche and then gradually expand your line of products to reach different markets.
7. Party games
Card games have a positive trend. These are not your typical 52-deck of cards or UNO. These card games are meant to make parties livelier. You can either design your cards or buy ready-made versions from manufacturers. All you need to do is to stamp the name of your brand on it and sell.
8. Cosmetics
Whether it is lipstick or make-up, there is a healthy market for cosmetics. It is easy to find suppliers who will manufacture this for you, but you need to be careful and ensure that the materials used are non-allergenic. Also, you may need to spend a few hundred dollars on getting models to become the face of your brand.
9. Reusable bags
These are bags that are made of cloth. Similar to water bottles, your brand here should carry a message telling people to help reduce global plastic wastes. There are many types of reusable bags in the market with different sizes, and you can start your line with several of these bags, so your consumers have more choices.
10. Clothing
This is a huge niche, and you need to start small. Choose a starting point, like dresses or tops, and then expand your line later. You do not have to order a thousand pieces per design, as most suppliers are willing to sell per lot or pack of six.
11. Workout equipment
Sell simple equipment like an ab-roller to those who want to get fit. If you enter this market, focus on products that people can carry, not heavy products like treadmills.
12. Smart backpacks
These are backpacks that were made for the trendy traveler. Backpacks like this one have compartments where the traveler can charge his phone. It comes in many futuristic designs, and these are built with sturdy plastic to protect the gadgets inside.
13. Shoes
Like clothing, there is a huge demand for shoes. However, you must carefully choose a specific niche. It is difficult to sell rubber shoes and high-heeled shoes at the same time. These two products must be separate, or you are likely to confuse the market as to what you are really selling.
14. Furniture
You can start your own furniture brand and sell items like the ones found in IKEA. Focus on furniture that is affordable and easy to build, especially those that are made of plastic that families need for immediate use.
15. Bathroom ware
People want their bathrooms to look great, and one thing they can do is to put accessories in it like shelves, toilet paper holder, towel hanger, and others.
16. Electronics
This is a huge niche where you can choose from computer gadgets like controls, keyboards, wires,
USB connectors, chargers, ports, mouse, and so much more. Like phone accessories, the key to success here is to make sure that your packaging looks really great.
17. Colognes
This is a great choice for those who want to stay fresh and yet do not want to buy expensive oil-based perfumes. Focus on selling cologne product in spray bottles that do not spill inside the carrier’s bag. When branding a product like this, it also makes sense if you name the scent differently. Make the names unique to make your brand stand out.
18. Kitchenware
From knives to wine openers, there are literally hundreds of products you can sell in this niche. This private label product requires a huge capital if you want to sell dozens of kitchenware. However, one thing you can do is to focus on selling one revolutionary product only, and market that as special edition kitchenware.
19. Eyeglass and Sunglasses
Start your own line of eyeglass and sunglasses. If you choose this niche, focus on the qualities of the glass and the toughness of the frames rather than the design. People who buy eyewear are much more concerned about how long the product is going to last.
20. Fishing rods and fishing gadgets
There is a huge market for people looking for high-quality fishing gadgets that you can sell online. The thing with fishing is that there are few physical stores, so making a website that sells products like these make the hobby more accessible to people from around the world.
21. Remote control hobby kits
From cars to airplanes, you can make a brand for these products and sell the accessories, too. However, this is a complicated niche, so you will only succeed here if you understand how they work. Your customers are likely to ask you for parts or for apps that they can use if you ever sell drones. Only enter this market if you love remote-controlled toys and gadgets.
22. Toys
With this line, you can market your products to parents who need lots of toys for their kids. The best approach here is to sell big toys like slides or large balls to prevent yourself from getting into trouble if a baby or a toddler ever swallow a small toy part.
23. Decorations
Home decorations are in demand, as few people really want to do DIY to make their homes look great. There are thousands of products that you can sell in this niche like candle holders, frames, plastic flowers, kitchen decorations, resin art, and so much more.
24. Camping gears
Sell tents, knives, camping bags, sleeping bags, bottles, first aid kits, and so much more. Since this is like kitchenware with so many items to choose from, start with one product and see what your customers demand before expanding your product line.
25. Sports accessories
Sell tents, knives, camping bags, sleeping bags, bottles, first aid kits, and so much more. Since this is like kitchenware with so many items to choose from, start with one product and see what your customers demand before expanding your product line.
26. Grilling accessories
These are grill for cooking, handles, charcoal blocks, lighters, matches, butane, and other materials used to make grilling fun.
27. Simple gadgets
These are also called novelty items that people do not really need, but they want to have because they are cool. Examples are USB ports that light up, battery-operated fly swatters, all-in-one tools shaped like a metal credit card, and so much more.
28. Gardening materials
From shovels to gloves, you can create a brand that focuses on the gardening niche. You can also add products like cutters, nippers, scissors, pots, and others.
29. Lunch box
Sell lunch box kits for all ages. You can market affordable products for kids or high-end glassware for adults. Just make sure that when you sell lunch boxes that you guarantee spill-proof containers. Customers will leave bad reviews if the sauce gets out of these boxes and stains their bags.
30. Notebooks and school supplies
In this niche, you will be covering a lot of products like pencils, crayons, colouring pens, and other stuff that children need in school. You need to find a manufacturer who is willing to sell them to you in bulk, like a pack of ten, and not by the thousands.
31. Hygiene kits
These are small bags that have nail clippers and other materials that a person can bring anywhere. These products are easily found in online market places where suppliers post their products like Alibaba.
Related: 13 Top Trending Dropshipping Products To Sell Online
Private Label Product Business Challenges
All business have difficulties. With this kind of business set-up, do not be surprised to face many challenges. Many businesses fail because the owners easily give up, especially online ones. If you give up, then you just wasted a lot of money on your inventory.
There really is no way but to move forward. Earning your first $1,000 may be difficult. But once you do, you now know how to get your business to $100,000.
Here are some common problems that you will face in your private label product business and some tips on how to overcome them:
Problem 1: Capital
A private label business is no joke. Manufacturers will not produce goods for you if you only order 10 pieces at a time. You need to order by the thousands. If the cost of each good is $1, then that means you have to spend $1,000 on the items, not yet including the cost of shipping and import taxes as you receive them.
Solution: Do not give up looking for suppliers online. There are so many of them. You can also negotiate a smaller number of order, but at a higher price. This may sound crazy, but if you have no big capital, you need to make a little sacrifice. A product that costs $1 per 1,000 orders may be sold to you at $1.50 per 100. You are paying 50% more, but you can surely afford $150 for 100 pieces.
The other solution is to look for print-on-demand or POD companies. You can set-up an arrangement with these companies or use their apps in online store platforms like Shopify and BigCommerce. With these companies, you can print your own logo or brand, and designs, but you do not have to order in bulk. They will print per piece for you. However, their product range is limited.
Problem 2: Government Requirements
If you are from the US, the IRS will certainly know your online selling activities. The last thing you want is to be fined or be put in jail for tax evasion. The problem is that not all people have knowledge about government requirements, laws, and obligations.
Solution: Find a lawyer or a tax expert. Today, there are many accountants and lawyers who market their services online. You will surely find someone in your area. The other solution is to do it yourself. Go to the government office and ask questions, get forms, fill them out, and submit the requirements required.
Problem 3: No Sales
You cannot expect your business to jump to the $100,000 level right away. You have to understand that success does not happen overnight. Having no sales for many days is ordinary. You are not alone in your experience, but choose the right path of not giving up as many others do.
Solution: There is no single solution to this problem. You need to identify the source of the problem and then fix it. It can be that your products are expensive; it is also possible that no one even knows your brand exists. Find out what is causing this problem in these areas: marketing, ease of use of the website, and value. If you can answer the question, you can find the right solution.
How to Find a Private Label Manufacturer?
You can find these manufacturers in your country or in websites like Alibaba. The costs of manufacturing will vary, but it is not difficult to find good manufacturers in China who can provide you with more affordable private label products.
The benefit of having a local manufacturer is that you can go to their warehouse and inspect the products yourself. If they are too far, you can ask them to ship the sample to you, and the cost of shipping will be smaller than those from China.
The benefit of going to Alibaba is that the product types you can select are endless. Locally, you may be limited to a few items. However, Alibaba has everything that you can possible think of. The only problem is that the shipping cost is higher, and you will wait longer to receive a sample.
Where Can You Sell Private Label Products?
You can sell your private label products everywhere. You can display it in your brick-and-mortar store, in Amazon, eBay, Facebook Shop, or your website. It is completely up to you to decide. If you know how to do all these, then you have more sales channels, and more customers can find your products.
Each website offers pros and cons. For example, Amazon offers FBA or Fulfillment by Amazon. In here, you will be sending your products to Amazon’s warehouse, and they will take care of the shipping. However, you will also pay warehouse fees.
Facebook is free, but your reach is limited, and customers cannot pay you directly through Facebook. eBay is also easy to use, and you can take advantage of the Seller Protection Program. You can also choose to build your own website with the help of online platforms like Shopify and BigCommerce so you can create your own rules and not pay a lot of fees.
Private label Final Thoughts
Online business is an exciting journey. Countless people have succeeded, and you can be the next one who can build a million-dollar brand. The key to succeeding is passion. You must have the determination to make your business work, and you must only sell products that you understand. It does not make sense to sell electronic gadgets like external hard drives when you cannot even use one.
You Might Also Enjoy
- Dropshipping For Beginners: The Simple Step By Step Guide To Starting
- How To Start A Shopify Store In 12 Minutes With A Few Simple Steps!
- How To Start A Dropshipping Business Online Today