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The Pros of Private Label

By: Lisa Doyle
Posted: August 3, 2010, from the August 2010 issue of GCI Magazine.
  • In considering a manufacturing partner, ensuring the company’s key product offerings are in line with what you want to sell is one of the most important considerations.
  • In addition to cutting-edge R&D, many private label partners have marketing teams to work with brand owners on packaging, design and sales strategy.
  • In creating a marketing story, R&D departments are often overlooked, and the story can be enriched and gain depth with the insights from the chemist’s viewpoint.
  • There can be tremendous cost and time savings by choosing private label, due, in part, to a manufacturer’s feel for ingredient costs and trends.

In the past, the term “private label” didn’t always conjure up the most appealing synonyms. “Generic,” “store brand” or “impersonal” may have come to mind—not exactly incentives for a company looking to start its own branded line of personal care products. A savvy company, though, will realize that the terms that should come to mind are more along the lines of “innovative,” “personalized” and “profitable.” According to the Private Label Manufacturers Association, private label sales in the U.S. alone have increased by 14% in the past three years, reaching $86.4 billion across all retail outlets.

From small hair salons looking to sell products with their names on it to large retailers looking to branch out into their own line of cosmetics, private label manufacturers provide plenty of solutions to make the lines successful for years to come. Still not convinced? Here are answers to some common concerns about going the private label route.

Q: What should I look for when choosing a private label manufacturing partner?

A: One of the most important considerations is that the company’s key product offerings are in line with what you want to sell initially—and a few years in the future as well. “Ensure that your brand growth plan, including messaging, performance differentiations and a three-year product development plan, are in line with the array of products the private label manufacturer offers,” recommends Krista Medlock, director of marketing at CBI Laboratories, based in Fort Worth, Texas. Sundeep Gill, vice president of research and development at Hayward, California-based Sun Deep Inc., agrees it’s wise to choose a manufacturer based on specialty. “Although many manufacturers can design and make a variety of different products, it is important to focus on what they do best. This way, cost and innovation can be optimized.”