Private labeling is precisely what it sounds like; you go up to a manufacturer and ask them to give you pre-developed and pre-tested products, which you must take to market with your brand name and packaging. The manufacturer controls the development (Specification, formulation) in this process. When buyers procure a product using private label manufacturing, they are typically putting their name on a product that the manufacturer has already designed and built. In this case, the manufacturer usually has control of the development, specifications, and manufacturing.
Advantage of private labeling
- Quick and easy access to the product: There is no design, engineering, tooling, or ramp-up phase required.
- Low start-up costs: The product is ready for market.
- Laser focus: Having a ready-to-market product helps the buyer focus on selling and marketing.
- Better control over marketing.The manufacturer can decide upon the label design, give inputs on Logos and tag lines.
- Brand recognition. The store or the carrying Brand may be different, but the product still carries your brand. If customers like the product, they will return to your brand, asking for more.