A private label product is a product that a retailer sells under its brand name but gets manufactured by a third party. Everything concerning the product is managed by the retailer, including the specifications of the product, packaging, and so on. After all, the product manufactured by the third-party facility will be sold under the retailer’s brand name and will represent its identity in the market. Therefore, complete control is necessary and also justified.
The Growing Popularity of Third Party Manufacturing
Ever since the concept started gaining popularity in the 1990s, third-party manufacturing has developed into a trend of sorts. You have products ranging from private label supplements to private label consumables, to electronic goods and just about everything that one can perhaps think of. The growing momentum of this model can be attributed to some significant changes in the retail and manufacturing domains and how they have collaborated seamlessly for profitable ventures. We look at some significant developments.
Quality Levels have Improved Significantly
About a decade ago, there was a wide gap between the quality of brand-name products and private label products. Top brands never considered third-party manufacturing owing to the fact that the product may not turn out as planned. They kept everything in their own domain. However, today, the gap has narrowed tremendously. Quality levels of private label supplement manufacturing, for instance, have improved significantly. There is also a growing sense of consistency in the quality levels of the complete range of products including even white goods. Distributors with contracts for private label production have also improved their procurement processes and have become extremely vigilant about quality monitoring.
The Emergence of New Categories has Pulled up Private Labels
Private labels have been in growth mode, expanding into diverse and fresh categories. Even when you visit a supermarket store, you will witness that private labels have moved ahead of traditional staples like canned peas and milk and even beauty and health aids. Today, you will find supplements, beer, or even clothing from private labels. Along with this expansion, there is also an enhanced acceptance by customers. As the quality levels continue to improve, private labels are gaining success in customer willingness to buy. Often, high-priced brand names are given a miss to pick up private labels that ensure quality and cost-effectiveness.
Global Online Marketplaces have changed the Game for Many
Global marketplaces like Amazon that offer a mind-boggling variety to customers have played a major role in how products and brands are being perceived. There is so much variety on offer that oftentimes; experimental purchases are also made providing ample chances to private label products so that they can reach customer homes. Once tried, the superior quality products find many takers. It is commonplace today to pick up private label chocolate for instance, instead of one’s favorite branded chocolate. You can also pick up CBD-infused chocolate supplements for therapeutic benefits from private label manufacturers.
Private labels are gradually becoming an integral part of our product lines. How well we choose, however, makes all the difference.