5 Must-Avoid Private Label Mistakes

In today’s market, with so much competition in stores, a brand’s packaging draws as much attention as the product inside. Millions are spent on product packaging for just that reason. It is becoming more and more common for large and small sellers to outsource their products and packaging through a contracted manufacturer, called private labeling.

The practice of private labeling is in front of us in our local Target, Sam’s Club, Wal-Mart, and other big box stores. Even your local grocery store has a few private label products down each aisle. Companies who choose to private label can find great success if they navigate and make sure they practice smart private label practices. Today, we will take a look at what exactly private labeling is, as well as our list of the biggest, must-avoid mistakes for your private label business. 

What is private labeling?

A private label product is manufactured by a contracted or third-party manufacturer and sold under a retailer’s brand name. As the retailer, you delegate everything about the product, such as what the label looks like, what goes in the product and how it’s packaged. You then pay to have your product produced by the manufacturer and they deliver it to you.

Many companies do this, the largest being Amazon. Target is another company that enjoys the benefits of private labeling — their Up & Up brand and their Archer Farms brand are both private labels. Restaurants have been known to private label condiments that have gotten popular with their customer base. Hair salons and spas create branded cosmetics and hair products, such as shampoos from another company. The list goes on and on, as it’s profitable if done correctly.

Mistakes to Avoid with Private Labeling 

1. Not Having Competitive Prices

Setting competitive pricing is a must and not doing so at the start can really hurt your brand. Make sure to do plenty of research before you send your product off to the manufacturer. Researching trends, competition and having competitive pricing are all on the path to you having a successful private label and optimized profits. 

Find products similar to yours that you’ll be in direct or indirect competition with and identify what makes yours special and what will stand out about your brand. Always set competitive prices to ensure your brand will take the lead on the shelf. 

2. Entering Too Broad a Market

Getting your new private label mixed into an oversaturated, overpopulated market, especially a mainstream one, is something you will want to avoid. Consumers are very loyal in these markets and rarely switch brands once they’ve become dedicated to their preferred product. 

3. A Poor Relationship with Your Manufacturer

Before you begin contracts with any manufacturer, make sure to adequately vet the factory and visit the warehouse or manufacturer's place of business to make sure you can inspect it thoroughly. Ask for product samples if you have time. You may be in a rush to get started, but selling an inferior product that hasn’t been tested could cost you thousands of dollars and perhaps even some business relationships and customers. That would be a huge mistake, so always make sure to have a trustworthy relationship with your manufacturer and be on good terms with them. Good terms means good business as miscommunication can lead to a bevy of issues you can’t afford.

4. Inadequate Inventory Management 

The simple fact is, if you don’t have a product for a company that needs it, they will look elsewhere. Making sure you are stocked with your hottest products is always a must and being sold out constantly is a mistake to avoid at all costs. Sometimes it cannot be avoided, but making sure your needs sync up with your manufacturer’s turnaround will help avoid mistakes like this.

5. Not Promoting Your Products Adequately

Having a high-quality product that delivers on what it promises means nothing if no one knows about it. Great pricing and a stocked inventory won’t help if you don’t have the right outreach to those who would want your product. Make sure you put a good portion of time and money into product promotion. Branding, advertising and marketing can make or break a product, or even an entire business. 

Partner with Aloe Labs for High Quality Results 

Interested in starting your own aloe brand of cosmetics, skincare or juices? Aloe Labs can help! We can create a unique formula to your desired taste or formulate your product to your specifications. 

No matter if your niche is in health, wellness, skincare, or other natural products, we have you covered! 

If you’d like to learn more about how aloe vera can enhance your products, or if you have some ideas of your own, reach out to us to learn more about how we can help you make your product a reality.

The Difference Between Private Label and White Label Explained

Private label and white label are two terms that marketers and manufacturers often use in their day-to-day activities. However, it is not uncommon for confusion between the two to arise.

Simply put, a private label is the act of marketing a good that another manufacturer originally made under a different name in a specific retailer. For example, if you own a small skincare business and want to market and sell your own aloe vera, you could contact the manufacturer of other major brands’ products and have them bottle and label your formulation with your brand’s label and logo, even customizing the formula as you wish..

However, white labeling is different in that you are simply branding a widely available standardized product that is made available for sale by many retailers. The only difference between the product on your shelf and the one in the next store over is that you have added your label to it.

Today we’ll take a quick overview of what it takes to truly comprehend these two terms.

What Is Private Label Marketing?

If you've ever been to a grocery store, chances are you have seen a variety of private label products such as laundry detergent or toothpaste. Here's an example: let's say that you have decided to create your own brand of toothpaste. Your first step would be to find an already-existing manufacturer that produces this type of product and arrange for your formulation to be made under your brand name and with your labeling.

Let’s consider another example of private label marketing: let's say there is a cake mix manufacturer that creates a line of cake mixes specifically designed for kids. If you want to use these cake mixes as the base for your kids' cake mix that you plan on selling, then having them create a version of it for your brand in particular, it would be considered private labeling.

When using this business model, you need to come up with a name and design a logo that goes along with it. From there, you must make sure that all of your packaging is consistent with your branding. This will help build brand identity and keep your products competitive in the market.

Private label products are often sold at large chain stores, and they are often cheaper than their branded counterparts. However, that doesn't mean a private label product is of poor quality.

Private label products are a growing segment, accounting for $158.8 billion US and 19.5% of the market in 2020. 

What Is White Label Marketing?

As we touched on earlier, white labeling means that you are selling a product under your own label while maintaining the branding of an original product. For example, let's say that you have created a line of bottled water. You want to sell this bottled water, which you have branded in your own way. However, you know that it would be easier for consumers to purchase from you if there is already a famous brand name behind the product.

To solve this issue, white labeling means selling the same bottled water that comes from the same source as other major brands, but resold with your label and logo. . 

The Bottom Line on White Label vs. Private Label Marketing

As you can see, there are subtle distinctions between private label and white labeling that are distinct in the control you have over the product itself. If you want to learn more about these differences or require assistance with any private labeling your own products, there are resources available to make your goals a reality.. The best thing you can do is figure out exactly what your goals are in terms of branding and marketing, take the time to learn about these two business models, and then decide which one will work best for you.

Let Aloe Labs Help You with Your Natural Private-Labeling Needs

Aloe Labs provide aloe vera products ranging from cosmetics to health food supplements. Our private label products provide your customers with the products they want while keeping your investment profitable. Our 100% organic aloe products are sold in bulk to keep your costs down and inventory stocked. 

Aloe Labs offers aloe plants, juices, powders, concentrates, and oils. You can also select from our already packaged products. No matter how you want to sell, we have a product to fit your needs at a price you’ll love. Contact us today to learn more about how our product can skyrocket your sales.

Why Should I Buy Wholesale?

Retail businesses are a vital part of our economy. In retail, it’s crucial that the products being sold are not only what your customers are looking for but that the products also work with your budget.

Wholesaling plays a massive part in making that happen. Wholesalers play a crucial role in the chain of consumer products. Whether they are manufacturers selling their products in bulk or bulk-buyers selling in a slightly smaller size - they provide an opportunity for both big and small businesses.

Wholesale can be an intense game to play, but don’t let that scare you away from what could be exactly what your business needs. Buying wholesale can be the game-changer your business needs to kick it up a notch.

This article provides a few reasons why you should consider buying wholesale and some tips on how you can get started. 

5 Benefits of Buying Wholesale

Reason #1: Low Prices

A wholesaler’s goal is to convince you to buy the most product you can, and an easy way to do this is to provide better deals for larger quantities. This allows you to buy at a lower price to make the most from the products you sell. 

This affects everything from the shipping costs to the amount of product the wholesaler is selling. With a better operating margin for your business, you can afford to pass the competitive prices down to your customer and maintain an edge on your competition.

Reason #2: Wide Variety of Options

Wholesale provides the chance to expand not only your inventory but also the types of inventory. Multiple brands, categories, types, or flavors improve the quality of your business’s inventory, which can influence the way customers perceive the versatility of your business.

With an improved stock and without the hassle of hunting down the variety of goods you need from different suppliers, you will begin to see exactly how much buying wholesale can benefit your business.

Reason #3: Buy in Bulk and Stock Up

Time is money when you’re running a business. While the wide variety can save you time and effort, there’s another factor to help. This comes from the wholesaler’s ability to provide so much product. 

By buying bulk instead of whenever you need, you reduce the number of times you need to restock and even the amount of money because of the deals wholesalers give for larger quantities. Managing a business can be stressful — let buying wholesale take some of the weight off your shoulders.

Reason #4: Quality & Customer Service

Buying in bulk is the most cost-effective technique of getting the products your company needs to get through the day. By having in-depth knowledge of their products and being aware of updates in their field, wholesalers ensure you are getting the quantity of products you need when you want them.

Some wholesalers are the manufacturer of the products they sell, which leaves them directly responsible for their product quality, and readily able to supply bulk (and often raw) goods you need. 

Reason #5: Compete with the Big Dogs

It’s no secret that bigger companies have the advantage in the wilds of business. However, with the money you’ll save on products, the new and improved stock, and the cut to shipping costs, you will find yourself closer to them than you might expect. 

Buying wholesale allows you to take a closer look at what your business needs to succeed. Learning about the products people want and keeping those stocks goes a long way in keeping up or potentially overcoming your competitors. 

Don’t Let Your Company Get Left Behind

There are loads of reasons you might need a wholesaler and many more reasons you can benefit from it. 

Some friendly advice we have found for anyone looking to buy wholesale is to keep an eye out for retail sales to make sure the price you’re getting for the product you want is best for your bottom line.

At Aloe Laboratories, we have dedicated our time and effort to providing quality bulk aloe products to businesses of all sizes for over 30 years. Our homegrown Texas-based business handles the production, harvesting, and processing of the finest organically grown food- and cosmetic-grade aloe from start to finish. 

We can provide you with the product, knowledge, and facilities you need to integrate aloe vera into your product. Learn more about Aloe Laboratories' work today and discover all the ways we can help your company.

How Does Private Labeling Work and Is It Right for My Business?

Private labeling is an efficient way to start or grow your brand without the headache and hassle of creating the products yourself. Products like aloe vera, which are natural extensions of other product lines, are the ideal investment for private label products. 

As a business owner, you want to look for private label products that will sell themselves. Products that will sell for 5 to 6 times their manufacturing costs are ideal as this will leave some wiggle room for sales and discounts. 

Private label products are appealing to businesses because they can generate profit without the burden of extra R&D, sourcing and manufacturing. It may sound too good to be true, but it isn’t. A study conducted by the Private Label Manufacturers Association found that private label items have a 25% market share of sales in the U.S. That’s ¼ of the market share. Certainly, something to take note of.

In this article, we’ll show you how private labeling can work for your business, and we’ll help you figure out whether it’s a good fit for your needs. 

 

How Does Private Labeling Work?

Private labeling works by creating a sense of exclusivity for the product. After all, it’s your brand on the label. When you find a product that can be private labeled and works well for your company, customers are driven to come back and purchase that product again. 

Private label manufacturers secure deals with individual sellers or brands to sell their product through the business or seller using their company name without credit back to the manufacturer. The individual seller or brand has the right to sell the product independently or with other products they’re already selling. 

Private label products work best for products that improve the value of other products. For example, if you are a company that sells health supplements and protein powders, aloe vera juice would make an excellent addition to your product selection, as it fits with the health and fitness focus of the brand. Likewise, if you are looking to incorporate natural ingredients into your cosmetic products, aloe is a natural fit for your line.

It is an ideal partnership for you and the private labeling company. Your customers become repeat customers turning you into a repeat customer for the private label manufacturer. It’s a win-win partnership.

 

Types of Private Label Products

Nearly every company has a private label product they sell. But, there are different types of private label products. 

Generic Private Labels

Generic private labels are the more traditional private label type offered by manufacturers. The objective of generic private labels is to provide a low price point option allowing brands to have a more budget-friendly option.

Generic private label products are generally the cheapest, low-quality, with minimal packaging design and zero room for promotion. 

Copycat Brands

Copycat brand private labeling are products that are reverse engineered from nationally known products. These products will give a brand's customers that sense of similarity. 

Value Innovators

Value innovators are private label products that are one step above the copycat brands. These private label products have the value-added features but remove the non-value adding features to reduce the per-item cost. As a result, these are often the best deals for the brands’ customers. 

Premium Store Brands

Premium store brands are private label products priced higher than some national brands because they are superior in quality. Brands use these products because the best brand their money can buy and pass that on to their customers. The manufacturer will focus on the quality of the product - and the price tag that comes with it.

 

How to Market Private Labels

Once you’ve selected the type of private label product you want to sell, you need to know how to market your product to your customers. Adding a new product to your existing catalog is excellent for bundling or an offer-added, but outside of that, you’ll need a bit more to get your new private label product in front of new or existing customers.

Branding

Having a brand creates a sense of legitimacy and trust by customers. Create a brand that is not only eye-catching but expresses who you are as a company. The right logo, website, and company story can draw customers in and encourage them to purchase your private label products.

Advertising

Advertising is the best way to get the word out about your product. Create a marketing plan by researching your target audience, where they shop, how they like to shop, and their spending habits.

Hire a Photographer 

Invest in a professional product photographer to create enticing and captivating photos of your product. Show video of someone using or consuming the product. You don’t have to make a full-on commercial for TV - video is used on social media every day to market goods and services.

List Product Details 

Consumers want to know what is in your product, the benefits, and sizing. In an ad you create, give as many details as possible to address any concerns a potential customer may have and let them know exactly what they get when purchasing from you.

Trade Shows  

Get a foot in the door using salespeople, marketing personnel, and executives. You want your product on as many shelves as possible, don’t be afraid to reach out and pitch your product to retailers. 

 

Is Private Labeling Right for My Business?

Now that we’ve shown you how private labeling works, the different types of private labels, and how you’ll need to market those private label products, you’re probably wondering if private labeling is right for your business. 

As with any business venture, there are advantages and disadvantages to selling a private label product. Knowing how private label products will benefit you and the potential pitfalls is essential to your success.

Advantages

Loyalty 

Building long-term success in the market needs loyal customers who purchase the product. When you use private labeling, customers become familiar with your product and your brand. This loyalty translates into a customer buying your product more because they trust it. 

Increased Sales Margins 

Private label brands generally have larger profit margins than resale products because making your own products costs less than purchasing pre-made products. 

You’re Exclusive 

When you use private labeling, you stand out from the crowd. You alone have the exclusive right to sell the products. 

Disadvantages

Minimum Ordering  

There is generally a minimum required inventory a manufacturer sets for bulk purchases. You may find that the minimum order required is more than you would typically want to purchase.

Brand Recognition 

Do your research on a private label product you wish to purchase. Customers like to buy products from brands they trust. If the product you’re purchasing isn’t common on the market, you may have to spend a little more money to market the product.

 

Let Aloe Labs Help You with Your Natural Private-Labeling Needs

The best way to ensure that you're getting the highest quality aloe gel possible is to choose a company with complete control over the manufacturing process, from growing to harvesting and processing. 

At Aloe Laboratories, we maintain our own aloe vera farm and production site, allowing us to craft the most satisfactory products possible while keeping bulk and wholesale prices low. We pride ourselves on producing aloe vera gel, juice, and powder specific to each customer's needs.

If you'd like to learn more about how aloe vera gel can enhance your products, or if you have some ideas of your own, reach out to us to learn more about how we can help you make your product a reality.