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Private Label Lessons From the Recession

By: Lisa Doyle
Posted: June 1, 2012, from the June 2012 issue of GCI Magazine.

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Ei Inc., a contract manufacturer based in North Carolina, also caters to both luxury and more affordable specialty skin care lines. “Obviously, the higher the price point, the more flexibility our formulators have in using the latest, state-of-the-art ingredients, which often times are more expensive,” says Roger Martin, senior vice president of sales and marketing for Ei. “This being said, we frequently ‘formulate to a price point’ and work within our given budget to create the best, most efficacious and aesthetically pleasing skin care product. This is where the experience and creativity of the formulators at Ei really shine.”

Extra Value

Affordable beauty doesn’t have to be synonymous with less efficacious or lower quality—in fact, it’s quite the contrary with many private label offerings. Many consumers are looking to get more bang from their bucks by purchasing beauty products that multitask, and private label companies that can meet this need are capitalizing on the trend. According to Brenda Gallagher, director of sales for New York-based Your Name Professional Products, “[Brands] are being conservative on the number of SKUs, reacting to their consumers’ interest in hybrid formulations—those that can do more than one thing—for example, a lipstick that is also a sunscreen. So the owners are being more conservative with their SKU collection, but the upscale formulations are stronger than ever in [garnering] interest from consumers. Consumers are educated and know what they need, and we aim to provide it in as few products as possible.”

Adding value can also mean offering private label products made with the organic ingredients that many of today’s consumers want. “Everything we do has a natural slant to it,” says Lieber. “What we sell is affordable luxury. Our organic line targets those who want all organic—mothers, expectant mothers, the younger generation. Organic is definitely growing at a faster pace, and we are an organic facility.”

And today’s sharp private label supplier should provide the proof to back up the claims made about the efficacy of its products. “We can both source and procure packaging and raw materials, then formulate around specific molecules or custom blends, develop methods to assay active ingredients and perform ICH stability programs that establish expiry dating,” explains Martin. “We do it all, which makes it very, very easy for the customer.”

Service-oriented Solutions

For a savvy private label supplier, it’s not just about providing added value in the products—it’s also extending into marketing and the business of the brand as a whole that can make a new customer into a client for life.