Private Labeling: How to Find Success Relabeling Products
Private labels account for 17.7% of retail sales in America. Often, these brands are popular products for cost-conscious consumers. For example, 80% of frozen fruit sold in the U.S. comes from private-label brands.
Even if a consumer insists on only buying name brands when they head to the store, there’s a chance they may actually be purchasing private label products that have been ‘white labeled’ for major manufacturers. Relabeling services have been common practice for decades; many major companies turn to outside sources when they need to expand their product lines.
But why are white label products so popular? For retail sellers, private labeling allows new products to be added without building factories (or production space). For manufacturers, relabeling products expands sales by increasing the number of sales channels.
So, how can you utilize private labeling to boost your business
How Does Private Labeling Work?
Private labeling separates businesses into partnerships, where one makes the product and the other handles marketing and logistics.
Manufacturers typically make one specific product or line of products. While they may sell them under their own brand, they can increase sales by selling to other brands, too. This expands their sales without increasing their marketing budget.
Some companies also offer services to modify products for their client’s needs, which can be as simple as adding a unique scent or color to an existing product or as complex as developing a new product.
When brands add new lines on their own without utilizing relabeling/repackaging services, each new product could require a large-scale investment, in both capital and time, to develop and put into production. However, by turning to a private label manufacturer, businesses can expand lines with minimal upfront costs. If the new product isn’t successful, it can be removed from the lineup. If it is successful, you know it’s worth developing and bringing production in-house.
In many cases, private labeling is a win for everyone. Manufacturers increase sales, which ultimately increases profitability. Sellers add new products, boosting revenue with lower financial risk. Consumers get more variety, buying products at a lower cost.
Why Do Consumers Choose Private Label Goods?
How often do you compare prices between brand-name products and store-brand products at the grocery store? There’s usually a big difference! That’s because the store knows you’re shopping there anyway, so they don’t need to advertise their brands. This reduces the total cost of the product, which is passed onto the consumer. Simply selling products for less is often enough to drive sales. However, the use of private labels isn’t restricted to low-cost goods.
Private labeling is common at facilities that make branded products, too. For example, when you buy a soda, it doesn’t always come directly from companies like Coca-Cola or Pepsi. Instead, they contract with bottling companies that produce the soda locally. Under these partnerships, the bottler follows strict requirements for making the product and may need to source some ingredients from the parent company.
Those same bottling companies can switch production to other formulas for private brands, boosting total sales. Similar arrangements are common in a wide range of industries, from motor oil companies to supplements and clothing lines. As far as the consumer is concerned, they’re getting the same high-quality product, no matter who is actually manufacturing it. This is a great way for companies to access facilities that are too expensive to build, and it reduces logistics problems with products that are expensive or difficult to ship long distances.
Relabeling relationships can happen at almost any scale.
Whiskey, for example, especially low-production novelty whiskey, is a big business right now, and consumers understand that most of these specialty brands are “sourced.”
Whiskey needs to age for years, turning development into a process that can span generations. So, it’s obvious that new brands of whiskey aren’t making it from scratch. Instead, major distilleries sell extra output in bulk. These new brands either buy this sourced whiskey (flavoring and bottling it themselves), or contract with distilleries to have the whiskey finished in a unique way. Then, these small businesses just have to apply a new label, and the whiskey is ready to sell. Overall, the process makes small batch production of flavored and specially blended products easy to manufacture. Plus, the relabeled product is already compliant with federal regulations.
Some products are similar but require unique marketing to reach target markets. A skin cream may deliver the results people of all ages want, but certain groups will ignore it if the label is marketed toward a specific audience. Rebranding, changing the old label design, or adjusting the scent may be all it takes to get it into the hands of more customers.
Pressure Sensitive Labels: A Cornerstone of Product Relabeling
Pressure sensitive labels are the top choice for relabeling products because they offer more flexibility than any other labeling technology available today. Unlike shrink wrap and wet glue labels, pressure sensitive labels are available in a wide range of materials, prints, and finishes. By changing the face stock, coatings, and adhesives, you can get labels that withstand a wide range of shipping and storage environments — while maintaining the label’s appearance.
If you’re using pressure sensitive labels on your products, you just need to change the reels in the machine to change the brand. This makes it simple to shift between products, whether the contents of the container are identical or tailored to each customer. Manufacturers can switch between ready-made products, while resellers can repackage and relabel products with ease.
Want to use different label sizes? Our applicators accommodate a range of label sizes. Calibration settings are stored and recalled by the PLC, making it simple to switch between package designs. These changes can go further than pre-printed label design, too.
Using print and apply applicators, you can add unique text and graphics to each container. The labeler can issue consecutive tracking numbers or get label information from your operating technology system, allowing for easy tracking across multiple product lines (plus the ability to customize packaging for special contests, usage information, and more).
We Can Help You Get the Look You Want for Your Products
Whether you make your own products or you’re relabeling products from another manufacturer to sell under your own brand, CTM Labeling Systems can help you find a labeling solution. Contact us to be put in touch with a local distributor. They’ll help you find a product labeling solution that meets your production requirements and delivers the appearance your customers are looking for.