• Diversitech Team

10 Benefits of Private Labelling for Your Brand

Updated: Apr 18


10 Benefits of Private Labelling for Your Brand


Private Label brands allow retailers to offer own-branded, customised to their exclusive specifications, high-quality products at affordable prices. These products are made by manufacturers that specialise in particular product types who then supply it to the retailer. They offer customers more choice and variation and are a great way for retailers to get their name out there and stand apart.


Related article: How to find the best private label manufacturers for your brand


If you want to make your brand stand out from the rest, private-label products are an excellent way of doing so. Your own unique identity can help customers recognize and identify what makes YOU distinct in comparison with others—making their experience all that much more satisfying!

A distinctive product, brand and marketing strategy helps convey quality while also establishing credibility as a trustworthy retailer seller whether it's in the shopping mall, high street or online.


1. Unique and Customised Products


Private label products are perfect for retailers looking to stand out from the competition. Because they’re made to customised specifications to reach a particular demand, private-label goods don't directly compete with national brands but instead often offer enhanced value.


2. Strong Brand Recognition


The customer knows what to expect when they buy from a retailer’s brand that's been around for years - they associate this company and their level of service with quality. So it makes sense that if customers were told a new item has the retailer’s "Brand X" stamped on it, then purchasing decisions are made much faster and with confidence.


3. Product and Packaging Customization


With private labels, retailers can take the reigns of their product development with the associated production plant and manufacturing headaches. They are able to control design and packaging as well as customize it based on what they need. Private Label gives retail stores ultimate flexibility when developing or sourcing products that will carry both your company's logo and fit into current market trends.


4. Control Marketing, Sales, and Customer Service


The flexibility to change marketing strategies, prices and promotions makes it possible for retailers who sell their own brand products. Also, retailer’s are at the front-line of providing excellent customer service which is so important in building brand loyalty by social media or word of mouth. This gives them more control over what will work best with customers in order to achieve success.


5. Increased Margins


Private-label manufactured products are much cheaper to supply than buying the same product wholesale from a branded vendor (or national brands) who has already incurred costs in their own brand development. The power to control margins lies with the retailer. With more flexibility on profitability, they can change prices and act as a marketing arm for their products by adjusting inventory levels according to market demand.


6. Responsive to Changing Market Demands


With ever-increasing competition for attention, customers are fickle and it can be difficult to keep their interest for long. Without any interesting product improvements or new releases, brands can quickly appear to be stale or old. Large established companies may have enough resources to design and develop new products, however, their large structures contain inertia and traditional thinking.


Private label is a more affordable and effective way to bring new products into the market. Private-label chains allow for quick analysis of trends and development time on these items can be sped up significantly. They're often ahead in responding when it comes down to changing customer needs.


Private label products usually have a smaller, but more targeted audience than other national branded product lines. This means that the inventory for these private-label items is usually low, as compared to mass-produced national brands, which reduces inventory levels with less unsold goods in case of decline or stagnation in that product niche or line.


7. Only You Sell That Private-label Product


Quite simply, if a customer loves your branded private-label product due to its unique customisation, features and quality and it’s only available from you, they will return to your store with a glow of confidence and interest. In addition, any other related products, with or without your brand, in your store will be cast with the same glow leading to more sales.


8. Brand Building


Private labelling is an opportunity to establish a new brand. For example, a retail hardware store can begin with products such as toolbox cases or tape measures simply being stamped and packaged with the retailer’s logo and branding scheme. Next, private labelling allows retailers to add value on top through design improvements like color schemes, added features or component selections which may appeal to more consumers.


9. Private-Label Companies Do the Heavy Lifting for You


If you're looking for a way to make your own products and bring them into distribution but don’t have the production or the supply-chain management expertise, then private labelling might be right up your alley. Private-labelling companies offer an incredible opportunity to work with you on designing, developing, and packaging your very own branded product to fit seamlessly with your business aims.


10. Business Risks Are Minimised


Using Private labelling can be a very successful and smart move for those with the right idea. It's not without any risk as in any kind of business, but working with professional and experienced companies will ensure they are known, kept minimal and planned for.


Private-label manufacturers are willing to work with you on small volume orders that allow testing of new product ideas at a low cost. Instead of investing heavily upfront in producing full-size products in bulk quantities together with managing large inventories/warehouses.


If the idea of the initial production doesn't fully succeed as expected, then private labelling allows you to get creative, test and tweak products until a successful design emerges that customers love. Once this is found, larger orders and higher profit levels are feasible for the business owner.


Conclusion


There are many benefits to private labelling your product. It is a great way for brands with limited resources or budget to create products that can compete in the marketplace, enter new markets, tap into consumer trends and differentiate themselves in the marketplace. Private labelling takes time, dedication and diligence but it will pay off when you see your brand help grow in popularity among consumers who love what you have created.


If you enjoyed this article then you will love our article on how to sell private label products on Amazon

Interested in launching your private label tool line?