Chances are that you’ve searched for private label manufacturers online already.
Do you know what the problem with that is?
That it is not simple to trust anyone with your private labeling needs.
In this guide, I am going to give you a simple process on how to…
- Negotiate, AND
- Work with
… Private label manufacturers from outside the United States (e.g. China).
So if you want to build a successful private label business, you’ll need this guide.
Let’s dive right into it.
What We’re Covering:
Chapter 1: Quick Introduction to Private Labeling
Selling private label products is not easy.
There are many things involved in the process that you need to be aware of and pay attention to.
What is private label?
Private label is a business model where buyers purchase source products from overseas manufacturers. The manufacturer is using its own material to create the products but then labeling it with the buyers’ own branding.
Customized casing with the merchant’s brand name and logo are usually ordered with private label products as well to create a fully customized version of different generic products to sell online.
The interest in private labeling has increased over the last few years and even a few traditional retail brands, like Target and Wholefoods, have invested heavily in private label products.
Image Source: A Bullseye View
Good & Gather is Target’s newest private label brand. It may be the newest but it’s joining a long list of other products in Target’s own private label.
Why private label?
People choose private labeling over wholesaling because it gives you more control over the product. Instead of selling another brand’s product, control quality and price down to the specifics.
Ultimately, this leads to a better customer experience.
Examples of private label products
Private label products can be in a wide variety of product categories. We’ve already created a list of 20 private label products that are in high demand right now.
Skincare products, tracking devices, keto snacks – there’s almost no limit to the type of product you can sell under a private label. However, some products will sell better.
These private label products are popular in marketplaces like Amazon. If you are interested in selling your products there too we’ve created a guide for how to sell on Amazon.
Image Source: MarketJS
MarketJS is one example of a private label manufacturer, offering gaming apps. Party games are also a popular product.
We’ll discuss more specific types of private label manufacturers and products later in this guide.
We partnered with JungleScout to put together a supplier/manufacturer database to help you find the right factory for your products. If you want to check it out, it’s right here.
Chapter 2: Advantages & Disadvantages of Private Labeling
Like most business models, private labeling has advantages and disadvantages. You have to research thoroughly and decide if the disadvantages are worth the return on investment at the end.
Advantages of private labeling
Most people are drawn to private labeling because of the customization aspect and because the buyer feels more in control of the products they are selling but there are several other advantages to private labeling. Let’s start by examining six of them:
1) Many suppliers to choose from
Aside from there being many suppliers to choose from, there are several different manufacturing styles as well.
Some suppliers sell the same product to many buyers, just with different packaging and branding.
2) High-quality products from specialized manufacturers
Others focus on creating a specialized product for a few vendors but make slight product modifications based upon the merchants’ specifications.
It varies depending on which manufacturer you work with and what type of private label products they produce.
3) You can order and test sample products
Research, test and discover which products give you the highest profit margin. Working with manufacturers is great because you don’t have to commit to the production of only a few products.
Image Source: K&F Coffee Roasters
Most manufacturers will charge you a small fee to ship the test samples to you but some companies, like K&F Coffee Roasters, will reimburse you if you end up doing business with them.
If you are unsatisfied with a product or want to switch up your product line, simply partner with a different manufacturer.
4) Low manufacturing costs and slightly higher profit margins
Unlike dropshipping, this business model has higher profit margins and the ability for brands to separate themselves from the competition.
There are lower manufacturing costs, compared to producing your own products, which also creates higher profitability.
5) A scalable business model
Working with a private label manufacturer also makes it very easy to scale your business. When business increases, you can order more products without the costs of having to expand your own production facilities.
During the offseason, decrease your supply chain without the worry of ongoing production costs. Simply lower the products you are ordering.
6) Unique branding & marketing
Unique branding helps you rank very well and that is why private labeling is one of the most profitable eCommerce business models.
By separating yourself from other generic products you are creating a stronger foundation to build brand recognition, customer loyalty and trust on, leading to a personal eCommerce store if you wish.
If you are new to marketing, take a look at our guide on 20 of the most effective ways to promote your products.
Disadvantages of private labeling
Many people would say the advantages of private labeling out favor the disadvantages but we must equally analyze them as well.
Let’s look at six now:
1) Slow communication because of the language barrier
Most of the disadvantages come from the manufacturers operating outside of North America. Merchants want to work with these companies because it is cheaper to produce the products they are selling in these other countries.
The language barrier can be one challenge. This can cause slower response times and sometimes miscommunications. It also makes it harder to form a personal relationship with the people you are working with.
2) Lower perceived product quality from your customers
Some consumers also have a sense of pride towards products produced in their own country. You risk losing some customers by working with overseas manufacturers.
However, plenty of products are still being imported and sold from overseas countries. The top three countries that imported the most American shipments by dollar value during 2018 were:
- Canada: US$299.8 billion (18% of total US exports)
- Mexico: $265.4 billion (15.9%)
- China: $120.1 billion (7.2%)
This is a risk you must calculate and if you choose to work with these companies, you have to decide how transparent you are going to be with your target audience.
Are you going to be proactive and upfront with the information or reactive and only mention it when someone asks about your production strategy?
3) Minimum Order Quantity (MOQ)
Depending on how big of a product inventory you want to sell, minimum order quantity (MOQ) could be an issue. Some manufacturers might have a MOQ higher than you are comfortable with.
While some manufacturers will be willing to negotiate the order quantity with you, others will not and you’ll have to decide if you want to take on that much inventory or search for alternative options.
4) Longer shipping & delivery times
Another issue that comes up when working with an overseas manufacturer is the shipping costs and delivery times. Both of these will be higher.
Are your customers willing to pay a higher cost for your product to compensate you for the costs and are they willing to wait for your product?
Many companies are minimizing the delivery times for their products to the next day or 2-days. Studies are finding that customers do not want to wait any longer than that.
This might be one of the biggest hurdles to get over when using a private label overseas. With proper planning, you can order the products in advance to the purchases being made from your customers so the delivery time for them is shorter than your order from the manufacturer.
5) Legal issues
Being a private label seller places the liability of the products on you unless otherwise established prior to the sale. This can bring a lot of legal issues along with it.
Product malfunctions or unknown side effects can great unexpected risks when using the product. Civil lawsuits are common so as a seller you need to protect yourself before you are in a risky situation.
Liability insurance is available. Also, make sure you are aware of any trading regulations, possible trademark/patent risks and make conscious decisions about the wording revolved around the products you are selling.
We highly recommend hiring a lawyer to proactively protect your business and handle any legal issues that come up. The process can be difficult and confusing so it’s always good to have someone with experience in your corner.
Don’t hire any lawyer, make sure they specialize in dealing with private label manufacturers like Private Label Lawyer.
Image Source: Private Label Lawyer
6) Higher competition
Depending on the type of products you choose to sell, you might be entering a higher competition market. This will require more work on your part to stand out from the competition.
You will have to work harder on your marketing strategy to outrank established brands. If you start competing with bigger brands and they see you becoming a threat, expect them to take legal action against you to try and stop or slow down your sales.
Chapter 3: How to Find Private Label Manufacturers
The first step to starting your online business is finding products to sell but you may be unfamiliar with this and a little anxious to reach out to companies.
Not to worry! Not only will we help you by providing specific places to look for private label manufacturers but we will also explain what they are, the different types and what to look for.
What are private label manufacturers
Still feeling confused? Don’t worry, you aren’t alone. When you type “What are private” into google – What are private label products is the number one suggested search.
Image Source: Google
Private labels manufacturers are the suppliers of generic products to resellers. They create products from scratch, using their own materials and production methods and then offer the products at a wholesale cost to retailers.
Most are willing to make slight product modifications or private-label branding to fit the buyer’s requirements.
Types of private label manufacturers
We mentioned private label vs white label above and aside from choosing between those two, ultimately you have to find one that connects with your business model.
There are so many types of private label manufacturers to choose from. Continuing reading for ideas on what to look for and specific information on different types of private label manufacturers.
With so many types out there, start by asking yourself what type of products you want to sell online and then you can start your search from there.
Still unsure? Check our list of 20 private label products that are in high demand right now that we mentioned earlier.
What to look for in private label manufacturers
The first and most important question you need to answer is what products are you going to offer? Once you know this information you’ll be able to search for a specific manufacturer to work with.
For more information, read our full guide on How to Quickly Find Private Label Manufacturers (Updated 2019).
Besides finding a private label manufacturer that specializes in producing the item you want also look for these 3 things:
- Competitive pricing
- High Quality/Low Defects
- Reliable Delivery
Where to find private label manufacturers
Although many aspects of private label manufacturing are difficult, finding one is not. You can easily search and find manufacturers on the internet.
1) Find private label manufacturers with JungleScout
We partnered with JungleScout to put together a supplier/manufacturer database to help you find the right factory for your products. If you want to check it out, it’s right here.
2) Find private label manufacturers with Google Search
Image Source: Google
Finding private label manufacturers can be as simple as making a Google search. You might have to look through a lot of information because of the amount of data Google has but if you have the time, you can find suppliers in most niches.
If you are having trouble locating a manufacturer, try variations of your search terms.
- Your industry + private label manufacturers (“clothing private label manufacturers”)
- A specific product + private label manufacturer (“women’s shirt private label manufacturer”)
- Your industry + private label supplier (“electronics private label supplier”)
- A specific product + private label products (“portable power bank private label products”)
- Your industry + private labeler (“fragrance private labeler”)
Author’s note: Remember that some companies use “white label” and “private label” interchangeably so try searching with that term as well.
3) Find private label manufacturers with Alibaba
Image Source: Alibaba
Alibaba is another great search engine to use as a resource when looking for private label manufacturers. The same search techniques you used on Google can be tried on Alibaba as well.
This is a great resource for overseas private label suppliers. If you haven’t used Alibaba before check out our guide Be Safe on Alibaba: Easily Avoid Scams, Middle-Men, and Fraud.
And a similar website where you can buy in smaller quantities to test products before making larger purchases on Alibaba is a website known as Aliexpress. We wrote a guide on using Aliexpress.
4) Find private label manufacturers with Reddit
Image Source: Reddit
You might not be familiar with Reddit or if you are, you might not think to use them to source private label manufacturers but give them a try.
There are many threads of users who are also searching for manufacturers but if you aren’t finding what you are needing, create a new thread asking for manufacturers for a specific niche or product.
5) Find private label manufacturers with Salehoo
Image Source: Salehoo
If you are still having trouble, try Salehoo, a wholesale supplier directory with over 8,000 low-cost suppliers. They handpick and securely verify all suppliers so you can avoid scammers.
Search their database of over 1.6 million products and brands. Aside from the search tool they also offer market research tools to give you the best chance against your competition.
Connect with knowledgeable staff or the friendly forums to find business solutions and discuss any challenges you are facing.
6) Find private label manufacturers in trade shows
You might also be able to source locally through trade shows or personal connections. This might not be as useful if you are looking for overseas manufacturers but it is still an option.
Image Source: Expodatabase
If you are unsure what local connections or trade shows are available to you start with search engine queries or use a tradeshow database, such as expo database.
Tips on how to contact private label manufacturers
Make sure you are very clear and to the point when you are contacting the manufacturer. Use simple terms and don’t write our numbers.
You may be working with someone who has a different first language than you and you want to avoid any miscommunication.
Use bulleted or numbered lists to clearly get your thoughts across. If you can, include examples of what you want your product to look like.
There are several sites to help you with the product mockup in Photoshop, such as mockup world.
Image Source: Mockup World
Make your examples as specific and close to the real product as possible. Use the exact colors and size specifications that you would want.
What to pay attention to when contacting suppliers
Before contacting any private label manufacturers, look for reviews and verifications.
Read the positive and negative reviews but also look for how the manufacturer is responding to those reviews.
Compare their prices to their competitors and look for their minimum order quantity.
Some manufacturers won’t list that information on their website but you will want to make sure you find this information out before signing any contracts with them.
Questions to ask when contacting private label manufacturers
Probably the most important question to ask is if they private label, white-label or both. Since these terms are interchangeable, their website might say one thing when in reality they only to the other.
After finding that out, move on to ask the following:
- What is their MOQ?
- Confirm the colors, sizes, styles or dimensions they offer the product in but also ask if they can make the modifications you are looking for.
- Are they authorized to ship to your country and will there be additional charges for shipping overseas?
- What is the price per unit and how long is production time?
- Ask what their preferred payment method is and share yours as well.
Don’t ask all of these questions in your first email but make sure you get them answered before committing to anything.
The manufacturer you choose will be an important part of your business so if you ever have a gut feeling telling you something is wrong, don’t hesitate to move on and find another provider.
Reminder: We partnered with JungleScout to put together a supplier/manufacturer database to help you find the right factory for your products. If you want to check it out, it’s right here.
Chapter 4: Types of Private Label Manufacturers
We provided tips on where to find private label manufacturers above but to help you even further, here are some specific examples to get you started on your journey:
Private label skincare manufacturers
The skincare market can be extremely competitive but there is still growth to take advantage of, especially if you focus on trends or find a niche connection. Think eco-friendly packaging, organic ingredients and unique product design.
The global organic personal care market size, alone, is projected to reach $25.11 billion by 2025, which is a CAGR of 9.5%.
The key is to find something that helps you stand out against the competition. You will also have to have a strong branding and marketing strategy.
Image Source: Vitelle
Vitelle is an example of this because they offer naturally sourced and plant-derived formulas in their products. They offer test samples so you can explore their hundreds of products.
Luckily, you won’t have to sort through all of their products to find what works for you. They break them down into three categories – clinical skincare, natural skin & body care and mineral makeup.
The first shipment can take 3-4 weeks but then reorders are only 2 weeks.
Private label clothing manufacturers
This might be the easiest type of manufacturer to find, simply because of how many are in the market. According to IBISWorld, there are 335,138 private label clothing manufacturers in the market.
To sort through that large market size, narrow down the type of clothing you want to sell. Try focusing on season clothing or certain style trends.
Image Source: Bali Swim
Swimwear is a great seasonal product to sell online and Bali Swim is a great manufacturer to look at. The offer low MOQs, high-quality products and constant support.
You can see from the very beginning they have a chatbot for assistance and that help continues through the entire production process.
Image Source: Zega Apparel
If you’re looking for a general clothing supplier, try Zega Apparel. They are a US-based manufacturer so you won’t have to deal with language barriers, high shipping costs or long turn around times.
They also offer a chatbot and great customer support. You don’t have to worry about sweatshop manufacturing or poorly treated laborers when working with them.
They pride themselves on not only protecting laborers and the environment but your products as well by sending them through at least 3 quality assurance checks.
Private label beauty products manufacturers
Beauty products are very popular as well in the online selling market and are anticipated to grow at 2.81% CAGR during the forecast period of 2018-2026.
Remember in large markets there is ample room to grow but you have to find a niche product or reason for consumers to buy your product over the competition. Here are some trending beauty product ideas:
- Anti-aging products
- Men’s grooming products
- Products with eco-friendly ingredients and packaging
- Specific children & baby products
Image Source: MANA
MANA is another US-based manufacturer with several certifications. Aside from color cosmetics, they also offer skin and hair care products.
It can be hard as a business owner to keep up with the latest trends so MANA provides a presentation including trend reports and “a glimpse into the concepts driving product development and innovation” twice a year.
Private label cosmetics & perfume manufacturers
Cosmetics is a great opportunity in the health and beauty industry. There are so many opportunities with new shades, glosses, powders, and more.
The creative control from the user’s end makes cosmetics and perfume very popular private label products.
Image Source: COSSWISS
COSSWISS is an example of many cosmetic manufacturers that allow complete customization of the products you want to re-sell. They are based out of Switzerland and have worked in 30 countries.
From concept to production, and beyond, they will support you every step of the way.
- Beauty Market Trends
- Brand Concept
- Tailor-Made Formulas
- Packaging Solutions
- Design and Copywriting
- Registration & Legal Advice
- Training Material
- POS Material
- Marketing Material
This is a one-stop-shop that lives for creating iconic brands. Besides cosmetics and perfumes, they also offer haircare, skincare and scented candles.
Image Source: UNIQUE fragrance
If you are looking for a manufacturer with a more specific specialty, look no further than UNIQUE fragrance. The German-based company specializes in custom fragrances and has a 100% money-back guarantee on their products.
Building your private label perfume is as simple as 4 steps:
- Design scent from over 50 exclusive ingredients.
- Customize your designer glass bottle, including your atomizer and cap. Then print your own name or slogan on it, even upload pictures!
- Finish the packaging, customized with your branding as well with an optional gold or silver seal.
- You have the option to choose and design samples or other promotional material.
Private label foods and drinks manufacturers
Earlier in this guide, we mentioned Target’s newest private label brand, Good & Gather. It’s no surprise this global brand has added another private food label to their portfolio when food sales are forecast to reach approximately 2.64 trillion U.S. dollars by 2019.
There is an opportunity in this market with health-conscious food and customized subscription boxes.
Other trending niche areas include:
- Vegan Food
- Organic Ingredients
- Gluten-free Products
- Non-GMO Items
- CBD Infused Products
- Edible Marijuana Products (in the states it is legalized)
- Keto Snacks
- Matcha Products
Image Source: Duke Foods
Duke Foods is an American private-label manufacturer offering ready-to-eat and fresh-baked food solutions. Their products have been fueling grocery stores, convenience stores, food service providers and wholesalers all over the country.
Their fresh-to-order capabilities, competitive costs and low minimums make them stand out against the crowd.
If you find yourself near Upstate, South Carolina, stop by their production plant and meet some of the team members that can help launch your online business.
Private label supplements manufacturers
In the supplements and nutrition market, there are always new health or weight loss trends to capitalize on. The manufacturers offer customized formulas, packaging and supplement type – think gummy vitamins vs traditional pills.
You should ask these questions before committing to a supplement manufacturer:
- Are they certified through the industrial regulation board and the local authorities?
- How vast is their variety of stock ingredients?
- What is their policy on flavor development?
Image Source: SMP
SMP (Supplement Manufacturing Partner) is a Nutritional Supplement Manufacturer Based in the USA. They claim to be the best and most responsive in the business but we cannot verify that. You’ll have to try them for yourself and decide.
We can confirm that they offer custom manufacturing and stock private label products for lower MOQs and shorter lead times. They also have a great customer service team for refunds, returns and any other needs you have.
By viewing every connection as a partner, they are invested in your business and its long term success.
Supplement types they offer:
- Gummy Vitamin
Private label electronics manufacturers
People are constantly upgrading their phones, computers and tablets so this is a great market to get into. Don’t only focus on those big-ticket items though, accessories like smartwatches, headphones, chargers and mobile power packs are also selling rapidly.
The Global Consumer Electronic Accessories Market is set to reach approximately $65.3 billion by 2025.
Look for manufacturers that can imprint your branding on the merchandise. They should also handle custom branding for packaging materials.
Image Source: Denver Electronics
Denver Electronics has several branches throughout Europe and Asia but they have worked with a wide range of international customers. They offer products for gaming, entertainment, fitness and communication.
All of their products come with a two-year warranty and local after-sales support. Products are also certified for the highest quality and safety standards.
Private label home & office supplies manufacturers
Home and office supplies go far beyond stationery and pens. It could include furniture, aroma diffusers, file organizers and much more.
Image Source: Alibaba
Alibaba offers 300 private label office supplies products, consisting of about 15% of these are notebooks, 9% are multi-functional beauty equipment, and 7% are water bottles.
Their stock of home supplies goes well beyond that with 433,707 home product supplies!
Image Source: LSPI
If you are looking for a company that specializes in private label office supplies, try LSPI. They are operating out of the United States with over 30 distribution centers nationwide.
Their product line contains over 40,000 different national and private-label business products, ranging from paperclips to printers.
Besides product distribution, their services include:
- 24/7 ordering
- On-site Inventory Management
- Tab Exchange Program
Chapter 5: Next Steps
You now know where and how to find private label manufacturers.
Of course, as I hope it is evident by now, finding reliable private label manufacturers isn’t as easy as it may sound.
Also, there isn’t such a thing as “the best private label manufacturer.”
This means that you can’t expect to find a supplier that does things exactly as you want them.
You have to adjust and accept the fact that private label manufacturing has quite a few drawbacks.
Last but not least, building your own brand and introducing a new product to the market can be really difficult.
However, that doesn’t mean you shouldn’t try; after all, many online sellers have managed to build private-label brands into 7 and 8 figure businesses.
Regardless if you are selling on Amazon or on your own eCommerce store, private labeling can be a great opportunity to grow a successful eCommerce business.
Just find the right private label manufacturers and start selling!
Additional Resources you might be interested in:
- Quick Guide to Figure Out What to Sell on Amazon
- The Best Online Marketplaces To Start Selling Products
- How You Can Make Big Money Importing From China – The Rise and Fall of My Empire…
There’s a huge section on finding, negotiating and ordering private label products in our brand new Amazon business course that teaches first time entrepreneurs how to launch their very own physical product Amazon business. If you want to check that out and see if it’s right for you click here…