Private label branding is when a product is manufactured by one company but sold under another company’s brand. A relatively new concept, it has become a common trend and is available in a wide range of industries. There are a number of advantages a retailer can experience through private label branding. Here are some of the key benefits to experience using this method.
Increase Brand Awareness
Most retailers sell items from suppliers. This limits what they are able to do with those products. With the use of private label branding, a retailer can sell a product that has its own brand on it, despite not manufacturing it themselves. This will allow the retailer to separate itself from its competitors. It will also allow you to create a unique image and marketing identity. As the product includes your brand rather than a supplier, it will allow you to create a strong recognition of your brand that will be displayed in public when purchasers use it.
Creating customer loyalty is essential for the success of any business. This can be difficult when a retailer solely sells products from suppliers. Many of these products could be available in other stores, allowing customers to go anywhere else and get the same product. People become loyal to brands, and private label branding allows retailers to exploit that. If a customer likes the products you’re providing, they’ll be unable to get it anywhere else. This will result in them continuing to return for similar products.
When your brand provides quality products, it opens up a whole new revenue stream. As your products become more popular, other retailers may be interested in selling them. In order to sell your products in their stores, they’ll need to pay you a premium for the right to sell your brand. This creates an entirely new stream of income that otherwise would not have existed. It will also expose your brand to a new group of customers that may not have previously been aware of it.
When a customer goes into a retailer, they will usually come into contact with the large brands. The brands and products displayed are usually at every retailer. While there are likely retailers that sell very similar products and stores that are similar to yours, private label branding allows you to provide something completely unique. The brand displayed in your store will be nowhere else. You can set up marketing and promotional displays that will be like none other. This will demand attention and separate you from the pack.
Higher Profit Margins
The main priority of a retailer is to make money, and private label branding allows you to make more money than reselling. When reselling products, you have to pay a premium to the brand that manufactured the product. This premium is usually much higher than it costs to acquire products in private label branding. The result is that you’ll be able to provide a much more manageable price for the products and keep more of the revenue.
Retailers are typically resellers only, but this results in missing out on a tremendous opportunity. Private label branding allows you to provide your own products to the market. This will allow you to create a unique brand, customer loyalty, and increase income. Contact TradeBeyond you’re in need of the ultimate sourcing app for private label suppliers.