Private label products are goods made by a manufacturer that are then sold under a retailer’s brand name. For businesses that want to learn how to private label products, the process is very similar to regular product sourcing. You’ll need to find products to sell, build a collection, and market them to customers.
Here’s how to private label products in seven steps.
1. Research Products to Sell
All sorts of products are available from private label suppliers: kitchen goods, electronics, specialty foods, cosmetics and skin care, tools, apparel, and fashion accessories, to name a few. The real challenge isn’t finding a product that you can private label. Instead, it’s finding one that can make you money. Consumer demand, competition, and cost all play a role in a profitable private label program.
Research Popular Products on Amazon
Even if you don’t plan to sell on Amazon, it’s a great place to research hot-selling products and get ideas for items to sell under your private label. As the world’s largest retailer, Amazon covers practically every product category imaginable. Better yet, they provide loads of trending sales data that you can use to research top sellers in any niche you want to pursue.
What you’ll use for this are Amazon’s Best Sellers pages, where you can drill down and find top sellers in any category or subcategory. Best Sellers pages also give you great insight into customer demand for all sorts of products, plus a good picture of the competition.
“If you’re going to be selling on Amazon, it’s crucial that you start the trademark process as soon as possible since you cannot be a verified brand on Amazon unless you have a registered trademark. The trademark process takes at least seven months, so you will want to get started even before you start selling, if possible. It’s very important for companies selling private label products to choose a name that is free from trademark infringement. I have a few clients that did not conduct the proper trademark searches, and they ended up with hundreds of products they couldn’t sell because the name was infringing on someone else’s trademark.”
—Andrea Sager, owner, Andrea Sager Law PLLC
Whether you’re a veteran seller or just getting started on Amazon, you’ll need a competitive edge. Download the “Smart Inventory Management for Increased Profitability” e-book from Payability for valuable tips on inventory management, legal tools, cash flow, and more.
Research Trends Using Google Ads
Google has a secret weapon that lets you see how many people are searching for a specific term online. It’s the Keyword Finder Tool in Google Ads. This is a great way to gauge buyer demand for products, even if you don’t plan to advertise on Google. Using search terms, you can see how many people search for a specific type of product each month. If no one is searching for it, you’ll likely have a hard time selling it. Otherwise, if people are searching for a specific product, it might be worth pursuing.
Google Ads also gives an idea of the competition you’ll face if you decide to sell this item. Here, they rate search terms as high, medium, or low competition based on how many Ads advertisers pay to run ads for that particular term. In this case, quite a lot of businesses target the search term “plastic wine glasses” because it is considered high competition.
When starting out in private label sales, products with good search traffic, of say more than 2,000 searches per month, and medium or low competition ratings usually are a better bet. They’ll also be cheaper to advertise on ads if that’s part of your marketing plan.
Even if you don’t plan to advertise on Google Ads, this keyword research combined with product research on Amazon can help you pinpoint in-demand products to sell under your private label.
Google Trends is another, less detailed but still useful tool when trying to identify product trends. It will show you whether searches for a particular keyword are increasing or decreasing, and how much general interest there is for that term.
Find a Product Niche
Finding individual products to sell is a good step but, ideally, you want to tie everything together around a common theme or interest. This will help create a cohesive brand identity for your store. Finding a niche also helps set your business apart from the competition by targeting a specific audience or filling a specific market need.
To find a niche market, there are three major steps:
- List your interests: Selling products you are interested in will help keep your business exciting.
- Determine the audience potential: Use tools like Google Ads and Google Trends to make sure there are plenty of other customers that share your interests.
- Research potential profits: Make sure the concept is profitable by determining interest, estimating costs, and doing market research to see price points for similar products.
“Many people look for one magic product, and the reality is there is no magic product. You need to build an actual business. Assuming the product you sell is useful and in demand, there’s not a good niche or a bad niche. Try to focus on finding a problem to solve or improving upon an existing product. Some basic tips would be to start with hobbies or activities you know. You’ll understand your potential buyers and the problems they face or issues they have with the current offerings better.”
—John Frigo, SEO Lead, MySupplementStore.com
2. Find Private Label Suppliers
There are many ways to find manufacturers that cater to private label resellers. Where you start your search depends largely on what type of products you want to sell under your private label. You can import or manufacture large orders of private label products, place orders at trade shows, or work with suppliers to dropship private label products.
Source from Alibaba
Alibaba is one of the top names in product sourcing and a great resource for new sellers. Alibaba lists millions of products from manufacturers worldwide, the majority being in China. The site makes it easy to search for any product imaginable. Plus, you can sort the results many ways including price, material, minimum order, and even the ranking of the supplier.
Alibaba is a typical wholesaling platform, which means many of the sellers require buyers to purchase hundreds or even thousands of each product piece when ordering. Placing and paying for such a large order upfront can be nerve-wracking, especially if you are a newer business. There are safeguards in place, including Alibaba’s Gold Supplier seller rating. If you stick with reputable marketplaces and use their high-ranked sellers, you should be safe from scammers.
If you decide to go this route to source private label products, first search for products you wish to sell. You can include the term private label in your search, but don’t limit yourself on these sites. Once you have a few candidates, contact each supplier to see if they offer private label packaging. Many do even if they don’t mention it in their listing. Also, don’t be afraid to negotiate a lower order minimum or price as many expect this and are willing to negotiate.
Use Google & Other Search Engines
Google search is useful for finding manufacturers worldwide or specifically in the United States. This is a good way to find U.S.-based private label suppliers for products that must meet health or safety requirements like specialty foods, seasonings, supplements, vitamins, and so on. Search for whatever you’d like to sell.
For example, let’s say we want to sell plastic wine glasses and prefer to find a U.S. supplier. We’ll use Google to search for “plastic wine glass private label supplier us.” This gives us a full list of private label suppliers to review and contact:
Visit Wholesale Buyers Markets & Trade Shows
Wholesale buyers markets are one-stop shops for access to manufacturers in every industry, from home decor to fashion accessories to specialty foods. These markets hold private label opportunities since all sorts of manufacturers attend, and many accommodate private label needs.
Many popular buyers markets combine home fashions and accessories, kitchenware, gift, specialty apparel baby, and fashion accessories categories like the wholesale markets at the Dallas Market Center.
There are many permanent wholesale buyers markets across the country. They also typically hold shopping events where they bring in additional temporary vendors. Other popular markets include:
- Americas Mart — Atlanta
- NY NOW Wholesaler Gift & Home
- Windy City Gift & Home — Chicago
- Los Angeles Gift & Home
- Las Vegas Market
There are also many temporary or pop-up wholesale trade show markets. These events are typically only open to business owners and allow retailers to shop products from hundreds or thousands of vendors at once. Popular temporary trade shows include:
Each trade show operates a little differently, but most of them are order-writing shows that are only open to business owners. At order writing shows, retailers place orders with the vendors right at the show floor. Payment is either collected right there at the booth or through an invoice after the show. Many shows also have a cash and carry section, where you can purchase smaller amounts of products to take home that day.
Use Malls & Retail Stores for Inspiration
Your favorite stores can be a goldmine of manufacturer names for products that you want to sell under your private label. Most product labels feature manufacturer names and locations, and some even include manufacturer websites. You can use this information in a Google search like “product name private label city state.”
There are also apps you can download on your smartphone to scan barcodes to pull up the manufacturer’s details. Armed with a smartphone camera, you can gather loads of manufacturer contact information during visits to the mall, specialty boutiques, and big-box stores.
3. Request Quotes & Sample Products
After choosing the products you want to sell and confirming the suppliers will private label for you, it’s time to request quotes and samples. Quotes should include these four things:
- Product prices for the quantity ordered.
- Any private labeling or packaging fees.
- Shipping fees to your fulfillment location.
- Any import requirements and duties that you’ll need to meet or pay.
Some suppliers send free samples if you’re an established company with a website to show them. However, others charge for samples requests from new buyers. Even if you have to pay for samples, it’s usually money well spent. Product samples give you a chance to review your product fully to make sure it’s what you want to represent your brand.
Remember it’s your brand, not the manufacturer’s name, that your customer sees. It must be worthy of your name because you are the one who has to stand behind it. Physical samples also are helpful when designing your product packaging.
“Private label products definitely can be profitable, but not every product will give you a profit margin that you need. Most of our products sold at a price that gave us a profit margin of about 30 % to 35%, sometimes higher. Many private label sellers try to make sales based on having the lowest price, but that’s not a great approach. There’s always someone who is willing to sell a similar product for less—especially on Amazon where there is so much competition—so everyone competing on price winds up cutting their profit down to nothing. You need to be able to create a brand and products that customers will pay for, even if the price is a little higher than some other competitors. You can do that by not cutting corners on the quality of materials, establishing good customer reviews, and having quality product photos that present your products effectively.”
—Marc Andre, founder, Vital Dollar
4. Design Your Logo & Packaging
This step is key to the success of your private label brand. From the look of your logo to package styling, this is where your creativity can help deliver an image to buyers and drive sales. First, you’ll need to create a brand identity. Then, you’ll need a logo. When those two steps are done, you’ll be able to create custom product packaging.
Create a Brand Identity
Brand identity is the overall design and messaging behind how customers perceive your business. Brand identity is especially important for small and online businesses because it helps create trust.
Brand identity design is made up of three components:
- Brand culture and values: Having a reason behind your brand and your products will help them resonate stronger with customers and gives you, the business owner, a template to work off of.
- Market position: Have a strong understanding of your target audience so that you can develop a brand that resonates.
- Visual components: All physical and visual elements of your brand should be instantly recognizable with your logo, colors, fonts, and packaging.
Craft your brand identity from the beginning, so that the result is a cohesive experience for the customer. Having your branding determined from the beginning will help streamline the process of selecting products and working with manufacturers since you know exactly what you want the result to look like.
“Private label products are profitable, but the secret to success isn’t necessarily solid product selection, but proper brand name selection. Garlic presses and fidget spinners come and go, but brand names like trademarks have the ability to last as long as they are in use and are protected and enforced. Tangible products might end up in landfills, but brand names for private label products can grow in value in over time. Overlooking this important step in the private label world can be a critical mistake.”
—Suzi Hixon, Esq, The Private Label Lawyer
Decide on Product Packaging
Private label packaging can range from simple labels to paper sleeves, hang cards, or boxes; whatever applies to your product. How it’s handled depends on your supplier’s capabilities and what you want for your brand. Since this is a key element in the private label process, it should be part of your initial conversation with potential suppliers.
Most often, your supplier provides artwork specifications for your custom packaging. Give these specifications to your designer, and they will create the necessary files to send to your supplier. Using these, the supplier prints packaging and assembles the finished products for you.
In some cases, private label suppliers take care of designing your labels or other packaging for you. You need to forward them your logo. There might even be a reason to print your own specialty packaging and assemble products yourself once they arrive. It depends on your operation and branding goals.
5. Decide How to Fulfill Orders
Before placing your product order, you need to decide how you’ll store products and get them into your customer’s hands. You need to know this upfront so you can give your supplier the correct delivery address when you place your order.
If you plan to sell your private label products in your retail store, this is an easy step. However, if you plan to sell online and ship products to buyers, you need to decide how you’ll fulfill orders, meaning how you’ll store products and pack and ship orders.
You have four primary choices for order fulfillment, including dropshipping, in-house order fulfillment, outsourced order fulfillment, or a hybrid approach.
Dropshipping is a fulfillment method for online orders where every step of the process is handled by the suppliers who ship orders directly to your customers and only bill you for the products you sell. Dropshipping is a good option for startup ecommerce businesses or any online businesses that don’t want to purchase wholesale products upfront.
2. In-house Order Fulfillment
In-house order fulfillment is when businesses manage their own warehouse and shipping operations, typically with their own facility, equipment, and staff. In-house order fulfillment is best for established businesses or businesses that want total control over their end-to-end operations.
3. Outsourced Order Fulfillment
Companies can outsource order fulfillment by using order fulfillment companies or larger third-party logistics companies. Fulfillment service companies specialize in inventory management, order processing, and shipping. So, they will handle all of these tasks for you. This is a good option for businesses that want to save time by not handling these operations in-house.
For many small businesses, handling order fulfillment on your own is too expensive and too time-consuming. FedEx Supply Chain is an all-in-one fulfillment provider that offers packaging, warehousing, transportation, and free shipping options for your customers without ruining your profit margin. Visit FedEx Supply Chain for a free consultation.
4. Hybrid Approach
A hybrid approach to order fulfillment combines a few or all of the above order fulfillment options. This is a popular solution for growing businesses because it offers a lot of flexibility. For example, you can use in-house fulfillment for custom products or items that need to be assembled, such as gift baskets. You can use outsourced fulfillment to help manage seasonal sales spikes without expanding your warehouse. Use dropshipping for large, expensive, or infrequently purchased products that you do not want to stock in-house.
6. Order Private Label Products
After spending time researching products, it is finally time to order your private label products. Make sure you have chosen a specific product and supplier, and that you have personally tested the products to meet your standards. As a new buyer, you likely will have to prepay your order, including shipping. At this point, be sure to review your quote or purchase agreement completely and double-check the following for accuracy:
- Product pricing and shipping charges match your quote.
- Delivery date, or date range if importing, is clearly stated.
- Import requirements or duties are included, if applicable.
- No surprise add-on fees appear that weren’t on your original quote.
Once you’re happy with the purchase agreement, you can place your order and pay. Wire transfer, credit card, and even PayPal are common payments that suppliers accept.
While you wait for your order to arrive, the next step is getting your website and other selling platforms like Amazon up and running.
7. Build a Website & Market Your Products
There are several ways you can market your products. Some sellers stick to their own platform and social channels for all of their sales. Others focus solely on Amazon or sell through both their own website and Amazon.
To build a brand, you need to have your own website, even if you plan to sell on Amazon. These big marketplaces bring in the sales, but it’s hard to create a unique identity if that’s your only platform. Plus, if you only sell on Amazon or eBay, you’re at the mercy of their whims. Any day can bring a change to seller fees, requirements that you have to meet, and so on.
Create an Ecommerce Website
Having a website is essential for any business, even if you sell in-store. Having a website makes it easier for new customers to find your business and will help bring in more sales. There are many affordable tools for small business owners to create ecommerce sites.
Popular ecommerce website options include Square online store, Shopify ecommerce platform, BigCommerce platform, and WordPress online store.
Square Online Store
Square is a software and payment processing company that also has a free online store feature. This is a great tool for businesses on a budget or anyone needing a fast, free, all-in-one website that includes payment processing and point-of-sale (POS) features.
Shopify Ecommerce Platform
Shopify is an affordable and popular choice for online sellers looking to grow their business. It’s easy to make a customized website on Shopify. Plus, Shopify has top order and inventory management tools as well as shipping and order fulfillment integrations.
BigCommerce is another all-in-one ecommerce platform that makes it easy to create custom websites, sell products, and manage sales. There are software packages for businesses of all sizes with features for shipping, product reviews, social media sales, and more.
WordPress Online Store
WordPress is a good option for businesses or individuals who want to sell private label products through a blog-style website that emphasizes content and community.
Sell Private Label Products on Social Media
Every business should have a strong social media presence to engage customers, increase brand awareness, and showcase your brand. If you sell products, social media is especially important because every platform also serves as an additional sales channel.
Create a Facebook Shop
Selling on Facebook is easy, and it puts your products in front of an additional customer base. To sell on a Facebook Shop, you’ll need to create a Facebook business page if you do not already have one. Then, upload your product catalog manually or using an ecommerce platform like Shopify.
Market on Instagram
Similar to selling on Facebook, selling on Instagram introduces your private label products to a much larger audience. Facebook and Instagram are both owned by Facebook, so once you have a Facebook Shop set up, selling on Instagram is a breeze. You’ll need to set up your Instagram for Business page, then sync the product catalog from Facebook so you can link to products in your stories and posts.
Frequently Asked Questions (FAQs) About Private Label Products
Figuring out how to private label products can be a tricky process for new or seasoned product sellers. If you have questions that were not answered in this article or the FAQs section below, visit our community forum to ask an expert.
What does it mean to private label something?
To private label something means to take a product that is manufactured by another company and add your company’s logo or branding to the product for sale. Essentially, you are creating your own product line or label and outsourcing the manufacturing.
What is an example of a private label brand?
Grocery stores typically have store brands that are private label. For example, Trader Joe’s often sells Italian food products under the brand Trader Giotto’s. Target has many private label brands, including Archer Farms, which the company uses to sell grocery items.
How do you make private label products?
Private label products are ordered typically from a manufacturer or wholesaler who creates the product and brands it for the retailer to resell under their own brand.
What is the difference between private label and white label?
The two are often used interchangeably, even within the retail industry. Private label products are goods that are made exclusively for that retailer. White label products are standard goods that have custom labeling.
Private label products are an effective way for any business to distinguish from the competition with unique goods and powerful branding. Anyone can sell private label products by doing initial product research, requesting quotes and samples, placing orders, and creating sales channels.
From developing a brand idea to finding the perfect products to crafting a brand that’s your own, it all takes time and careful planning. Using an ecommerce platform like BigCommerce can help you set up your store and social media sales channels in no time. Click below for a free 15-day trial.