For small businesses, especially eCommerce sellers, it’s hard for them to earn the first pot of gold by selling private label products online. So choosing the right ones to sell is very important for small businesses.
Read this post to learn about private label products before you start your business.
What are Private Label Products?
A private-label product is one that you get produced by a manufacturer but sells under your brand name. You can make some improvements to the existing products to cater to the customers, such as changing the size, shape, pattern, etc. Or you can just change the label or packaging for attractiveness.
You can also develop a brand-new product, but it is risky. Because there is a significant initial investment cost, and there is no guarantee of receiving satisfactory feedback once the product enters the market.
Advantages of private label
Private labels can help you differentiate from competitors.
If you want to choose a simple and cost-effective way, you can opt for customizing exquisite packaging for existing products. This way, even if you are selling similar products as your competitors, it will be easier to catch the attention of customers, stimulate their desire to buy, and consequently increase your sales. As product sales gradually accumulate, it will also help consumers remember your brand, and then enhance brand awareness.
If your budget is sufficient, you can start by researching the market to identify which products people urgently need and what problems they hope to solve. Then, you can develop specific products to address these issues.
This approach will not only let your products be well-received on the market for addressing the pain points of the target audience but also help you establish brand recognition.
What Private Label Products Are Suitable for Small Businesses?
Not all products are ideal for small businesses pursuing private-label opportunities. You must consider factors like market saturation and profit margins. Here is some advice for you.
1. Small & Light
Take a second look at your list of products and separate the ones that are small and lightweight. These products make for a good selection because they are easier and cheaper to ship. This means that you can also bundle in free shipping without slicing your margin while tempting your potential customers. It will also help you lower your international shipping cost from the manufacturer.
2. Rigid Daily Life Items
Such products often never go out of customers’ shopping lists. Selecting such products will ensure that you don’t have to sit on the inventory for long and you’ll be able to successfully sell all of your products. Just ensure that your product stands out from the competition so it becomes more attractive than the rest.
3. Product with Reasonable Price
Products that are priced between the $20 and $100 range are more likely to sell quickly. Oftentimes customers either don’t come with a shopping list or don’t have that certain product in their mind but they may buy such products more likely on impulse because of the low price.
If the price of the products is too high, it will bring you a higher investment cost. But if it is too cheap, you can’t earn an ongoing and enough profit. So $20-$100 is a reasonable price range.
4. Avoid Seasoned or Perishable Products
The problem with selecting seasonal goods is that if you’re not able to move your inventory quickly enough, you’ll be sitting on the stock until the next season arrives. This drives your stocking and other related expenses.
For example, the products related to Christmas, Easter, New year, etc., are seasoned products that only make a good sale in their respective season and fail in others. Similarly, perishable goods will turn into bad inventory if you can’t sell them.
Certain products are fascinating to be considered for private label products, but you have to avoid them.
5. Be Careful of Electronic Products
Electronic products generate good profit, but there are two main reasons to avoid such products. One is more return cases and the second one is possession of big sellers. Overtaking big sellers is quite difficult in the electronics niche and will cost you a fortune to do that. Moreover, electronic products will increase your returns cases as they gather more complaints than any other niche.
6. Products with Many SKUS
SKU (Stock Keeping Unit) should be low or short as it will be easy for you to keep a track record of the inventories of the products. In addition, products with many SKUs are not recommended for small businesses as you need to invest more in inventory.
7. Avoid Health Products
The health products need to undergo several testing rounds to get approved for sale on all online platforms. Thus, choosing such products for a new small business wouldn’t be worth the investment. That’s because investing in their testing and multiple certificates for sale would be more than the profit margin.
8. Avoid Patent Products
Whenever you select a private label product, always go for patent-check before finalizing it. If your product is patented, you cannot sell it under your label as some other brand already owns its copyrights. All online platforms have set strict patent regulations, if you would sell patent products, you may encounter patent disputes. Perhaps your stores will be forced to close on the platform.
5 Inspiring Private-label Case Studies
Caddis
The eyewear industry has long been a competitive market, but Caddis Eyewear stands out. Its success comes from
Seize the “silver economy” by focusing on the elderly population. Many older individuals want fashionable reading glasses that reflect their personal style. Furthermore, compared to younger people, the elderly have greater financial freedom and higher brand loyalty.
Caddis positions itself as an “anti-aging brand,” conveying a new attitude that strongly opposes age discrimination and encourages people to embrace their age and appearance. This resonates with the elderly.
Caddis’ flagship product is reading glasses, and it also offers various eyewear products like blue light-blocking glasses and sunglasses. Targeting the elderly demographic, their marketing strategy primarily includes
Launching the “Age Awesome” brand theme. They feature a significant number of elderly users in their advertisements, incorporating elements like guitars and motorcycles, which represent youthfulness. This visually inspires users’ aspirations and identification.
Product Collaborations. It selects middle-aged and elderly individuals who have already achieved recognition in their fields, such as tattoo artist Mister Cartoon and host Katie Couric. It gives the brand a deeper meaning, truly touching the emotions of middle-aged and elderly people.
Collaborating with KOLs that align with the product positioning to attract traffic. In addition to creating promotional videos, bloggers also post exclusive offers in their Instagram and Facebook posts, effectively boosting product sales.
Caddis currently has around 16k followers on Facebook and even more on Instagram, with approximately 70k followers.
Most brands are chasing after Generation Z and the Millennials, but few brands pay attention to Generation X and the elderly population. However, as the trend of an aging population becomes more apparent, the silver-haired economy may potentially create a market for brands.
Thinx
Nowadays, more and more people are starting to reject menstrual shame. When this concept was just emerging, Thinx quickly seized this opportunity and began to rapidly develop.
Unique products
Their main product is period-absorbing underwear, designed to replace traditional feminine hygiene products such as tampons and menstrual cups. They also offer products for moderate incontinence and have expanded their range to include dancewear for those experiencing their menstrual cycle.
From a data perspective, unique period underwear has attracted the majority of the website’s organic traffic.
Feminism positioning
They aim to provide women with more freedom and convenience, which aligns with the growing pursuit of women today. Moreover, it further conveys brand values by supporting women’s initiatives, such as donating period protection underwear and funds to non-profit organizations dedicated to helping women like #HappyPeriod. This can increase brand identification among female consumers and, in turn, translate into actual consumption behavior.
Creative ads
Thinx initially ran subway ads featuring eggs and grapefruits as a way to hint at menstrual blood, all while encouraging women to comfortably discuss periods in public. This taboo-breaking guerilla marketing campaign quickly gained attention and boosted Thinx’s recognition.
Würkin Stiffs
In the highly competitive fashion industry, Würkin Stiffs specializes in the field of clothing accessories. It has gained a significant market share thanks to an innovative product – magnetic collar stays. This is because
The product is practical and solves the common issue of men’s shirt collars becoming disheveled. These magnetic collar stays help keep the collar straight and clear. They are also easy to use and versatile, suitable for any type of collar and shirt.
Clear target audience, mainly catering to men who need to wear formal attire and have high expectations for their quality of life. This group of people also tends to have relatively high purchasing power.
Würkin Stiffs primarily sells its goods on Amazon, with over 2,000 monthly orders, indicating its high popularity on the market. Its product rating is 4.7, showing a high level of user satisfaction.
BloomChic
BlooChic specializes in stylish, comfortable, and affordable plus-size women’s clothing, focusing on the North American market.
Clear market positioning and address users’ pain points.
The United States is the world’s largest market for plus-size women’s clothing, with over two-thirds of women needing to wear sizes 14 and above. However, only 2% of women’s clothing brands offer plus-size clothing, and the size range they provide is limited. BloomChic, on the other hand, offers a size range of 10-30, giving users more options.
Encourage the plus-size community to be confident
In both social media marketing and live streaming, BloomChic conveys positive brand values to the plus-size audience, such as “fashion,” “confidence,” and “body positivity.” These are factors that are beloved and embraced by this type of users, and they can resonate with them.
BloomChic also engages with users on social media platforms with an open attitude to gather user feedback, continuously improving and iterating their products. It follows a multi-platform layout strategy, with the most success seen on Instagram and Facebook, where they both have hundreds of thousands of followers.
Strawberry Leopard
As a private label brand under Sally Beauty, Strawberry Leopard is a hair care line designed for color-treated hair. They specialize in harmless hair dye products, offering 18 customizable vibrant shades, with the most popular one being strawberry pink. Their products cater to
People who enjoy dyeing their hair with extravagant colors to express their personality.
Addressing people’s specific issues for dyeing their hair, such as maintaining long-lasting, vibrant colors without damaging hair quality.
The product packaging further exemplifies their brand positioning. The packaging features bold and striking colors that align perfectly with the brand’s wild, colorful, and intense personality, just like the hair they care for.
They mainly share customers’ experiences with products on Instagram and TikTok, as well as collaborate with internet celebrities to review products. Both platforms have over 10,000 followers. In the niche market of extravagant hair dyeing, they have already established a certain brand influence.
Although the marketing strategies of large companies and small businessmen differ, we can still take inspiration from their product selection strategies. Large companies, due to their ample resources, conduct extensive market research before launching new products, including analyzing market trends, competitors, and the needs of their target audience. Small business owners can gain insights from this and discover opportunities in niche markets.
Where to Wholesale Private Label Products in China?
Alibaba
Alibaba is often the primary choice for most private-label businesses to source suppliers. While the suppliers are certified there, the quality of service can vary, so you need to be discerning. You can evaluate suppliers from multiple angles by asking questions, such as whether they specialize in the product category you’re interested in, whether they have similar customization experiences, what their product lead times are, etc.
If you have a potential supplier in mind, you can start with a small order to test the waters. This way, even if issues arise, you won’t incur significant losses. During this process, you can assess whether they are truly professional, whether they proactively address problems, whether they provide feedback on your suggestions or concerns, and if their communication is timely.
JingSourcing
If you want to focus on product marketing or have less experience in private labels, ask JingSourcing for help. Located in Yiwu, JingSourcing has helped 4000+ clients source and customize products from China.
We have integrated factories all over China and they specialize in different product categories. We keep a good relationship with them, so we can offer you a competitive price, even if the MOQ is low. And compared to factories, we can make a much easier and quick communication with you.
Meanwhile, we can conduct product inspections as required. Besides AQL sampling inspection, we offer a more flexible solution. We can inspect the products based on your focus, such as scratches on the leather surface or any workmanship issues like crooked stitching lines.
During the inspection, we will send you photos or videos of each defect, and communicate with you in real-time if any problem occurs. If you have any additional requirements during the inspection, such as drop testing for product packaging, it is also acceptable.
