Costco and Private Label Brands
Private label branding is the process of purchasing products or services from a private manufacturer (often a private wholesaler), rebranding them under your brand name, and then selling them yourself. You can use such a business to start your own company and be your own boss. However, it doesn’t always work out that way. There are many advantages and disadvantages with using this type of strategy, so you need to carefully consider whether or not it would be right for you.
The first advantage of using private label branding packaging is that you can save a lot of money. If you’ve invested in new products, you can use those savings to re-brand them under your name. It also allows you to own your own brand, without having to financially be beholden to a third party’s brand.
Another advantage of private labeling is that you can increase your profits by using your own packaging. This is especially true if you purchase the products in bulk at a wholesale price. By having your own packaging, you can put more items on your shelf for sale, without having to buy more product than you can sell. For instance, let’s say you want to start a candle business. With private-labeling your packaging, you can offer candles in a variety of scents, each with its own wax content. You’ll be able to increase your profits by offering a wider range of candles with your special packaging.
There is one disadvantage to using private label branding, however. In some cases, the manufacturer that is producing your products is not willing to release your finished product for you. In other words, they may not have the ability or the incentive to do so. You may be able to get your manufacturer to change the design of your packaging, but then they won’t be able to change the actual contents of your package because they are tied to the manufacturer and not the wholesaler. If this happens, you will lose a substantial amount of money.
Private labeling allows you to control your brand and your packaging. The downside to using private label branding is that it can be difficult to distinguish yourself from thousands of other businesses using the same product and the same packaging. Branding private label products allows you to add your personal touch, but this does not necessarily increase your chances of success. To maximize profit, you need to create your own private label manufacturing line and develop your product line based on what will sell best for your company. As with most things, there is an argument for both sides of the argument. If your goal is to save costs, it is often worth paying the extra money to purchase your own private label manufacturer. If your main concern is quality, it may be more economical to purchase from a third party manufacturer and let them do all the work. The decision ultimately comes down to your company’s unique situation and the amount of time and effort you want to put into the private labeling process. You should consult with a third-party private labeling manufacturer before you make any final decisions or sign any contracts.