Private label is when specific products are produced by a manufacturer but packaged and sold under the retailer's name. It raises brand awareness and distinguishes your brand from the competition. In other words, private label is a generic, unbranded product.

Private Label Process

1. The product prototype is designed.

2. The prototype is manufactured into the actual product.

3. Supplier sends consumer an order from warehouse.

4. The consumer places an order from the online store.

Investment

How much do I need to invest in private label? This is the general question that many clients ask manufacturers. It all depends on the desired manufacturer and amount of products ordered. Generally, your investment includes the finished product fees and extra shipping costs. Some manufacturers offer storage services and inventory tracking for additional fees.

Benefits

• Control over production-retailer has complete control over product ingredients and quality that the manufacturer uses for the desired products.

• Control over pricing-because the retailer has complete control over the product design, this leads to having control over all production costs.

• Control over branding-private label products bears the brand name and packaging design created by the retailer.

• Control over profitability-because the retailer has control over production costs, this will let him control profits.

Disadvantages

The main disadvantage of private labeling is product owners' dependency on third-party manufacturers.

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