The Opportunity of Private Labeling
I was having breakfast at a local restaurant the other day when I noticed on the table there was a bottle of hot sauce with the restaurant's name on it. I was impressed because I knew this was no chain - it is just a small independent restaurant that was taking advantage of private labeling. It is one of a growing number of small restaurants that enhance their brand by putting their own name on products.
First, let's be clear about what I mean by food sleeves Private Labeling. According to Wikipedia, the online encyclopedia, private label products or services are typically those manufactured or provided by one company for offer under another company's brand. So this covers everything from Wal-Mart brand products to the small restaurant putting their label on someone else's hot sauce.
It is amazing the number of businesses now that are engaged in some form of private labeling. Restaurants, hotels, spas, hair salons, even car dealers are all putting their own brand on products such as hot sauce, lotions, shampoos, coffee, lip balm, bottled water and wine. Many corporations want to put their own logo on products that they giveaway to reinforce their brand. The corporate gift market is particularly busy around Christmas. There are also many small businesses that want to appear more professional by having their own brand of products to sell - coffee and bottled water are particularly popular here.
Getting Started
So as manufacturer how do you get started selling your product via private label? The easiest way is to just start selling to other local companies. If you sell coffee then start with the local cafés and donut shops - many companies are happy to support other local companies, particularly if they can get their own brand name on the products. Obviously, your existing customer base would also be a good place to start. You can offer to put their name and logo on the labels that go on your product.
Once you have a few private label customers you can then start a formal "Private Label Program" giving prospects examples of what other companies have done. One important point to note is to be sure to make it as easy as possible for your customers. You should offer to do all the work for them including the labeling, so they will just receive the finished product. You may end up having lower margins on your private label products, but you can make up for that with increased volume.
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