Start-ups can be difficult to get off the ground, especially if you’re selling a product or service that no one has ever seen before. However, private labeling can help you take your business from concept to launch with less risk and greater rewards than you might think. Here are five ways private labeling can help launch your start-up.
What is Private Labeling?
The term private labeling refers to any type of business in which you sell a product or service under your own brand. While it’s not exactly an easy feat, private labeling can certainly help launch a start-up, as it serves as an excellent way to make money from other people’s products. For example, when you buy products from Alibaba, Taobao and other wholesale suppliers online that don’t come with branding, they’re called white label products. When you add your own logo and branding to these products and resell them on Amazon or Etsy, they become private label products.
1) Competing with the big boys
In a saturated marketplace, there’s more competition than ever. Smaller brands have to be just as savvy as large competitors in order to make it in today’s market. Many consumers are wary of buying brand new products and will opt for something they know they can trust. In many cases, private labeling has allowed smaller companies to get their foot in a door that would otherwise remain closed to them. When you offer an already established product at a lower price point, you can win over customers who might not normally give your brand a chance. This is especially important when your product is similar to one already on shelves but with higher price points or fewer features. With private labeling, you don’t need to reinvent the wheel—you just need to make sure yours rolls are better than everyone else’s.
2) Being unique in the market
The quickest way to get your product on shelves is to be unique, and that’s exactly what private labeling allows you to do. By selling a unique product, you can jump past endless negotiations with distributors or fighting for shelf space at major retailers. Instead, you can focus on growing your business from within by using social media marketing to promote your brand directly to consumers. You don’t have to worry about getting lost in a sea of competitors either; if someone wants your product, they’ll find it online or through word of mouth. Plus, since you own every aspect of production and distribution (including packaging), there are no third parties involved—just you and customers!
3) Cash flow is king
One of my favorite quotes about money is, Cash is always king. As a business owner, you’ll need to understand how cash flow can drive your business. When money comes in from a customer, it needs to be spent on inventory and/or used for payroll. On that same note, when inventory is sold to customers, those proceeds will eventually be needed for cash flow as well. Managing cash flow should be one of your top priorities because if you run out of it, your business may close its doors. If you are launching a start-up, private labeling products can help reduce costs by reducing or eliminating some of your expenses related to manufacturing and distributing products. You won’t have to worry about ordering large quantities or making payments up front for manufacturing either. This means less money tied up in inventory and more available for operations. If done correctly, private labeling could help get your business off the ground faster with less risk involved!
4) Not having to do everything yourself
If you’re starting a business, you’re probably not an expert in every area you need to be successful. It’s good to have systems and processes in place so your team can function effectively; however, that doesn’t mean you need to hire people for everything or do everything yourself. In this case, private labeling can help. When done right, private labeling is about getting products made for you rather than making them yourself. You can outsource things like design, marketing and even manufacturing if needed. This frees up time to focus on what matters most: sales and customer service. After all, it’s hard to sell someone something when they don’t know what it is!
You may also want to take advantage of Amazon FBA (Fulfillment by Amazon). With FBA sellers send their inventory into Amazon warehouses where they are stored until they are sold on Amazon. This allows sellers to scale their businesses quickly without having to worry about warehousing costs or hiring employees with those responsibilities.
5) Become an expert in one area
Private labeling can also be of great help in developing in your own niche. It allows you to become an expert in one area, allowing you to sell a product that is unique and targeted at a specific audience. For example, if you know how to make a particular type of soap or candle, and have found that there is not much competition for these products online, then private labeling might be for you. This will allow you to create your own brand and sell it online with little risk involved. If people like what they see when they visit your website, then they are likely to buy from you as well!
If you are looking to learn more about private labeling and would like assistance with building or growing your business, please feel free to reach out to C2W! Our 17 years of experience is our extremely valuable asset in helping you achieve your success!
