Opportunities of Drop Shipping Private Label
As a retailer with an online ecommerce store who has always wanted to increase and expand their business but finds that they cannot cope with the amount of work involved, has to find the best drop shipping private label company for their products. By reselling products from a manufacturer under a private label, retailers can now develop their business to new heights.
Private label products are sometimes also known as white label or private label. These products are unique to one company but packaged and sold under the brand name of another company. Private labeling allows retailers to start their own business with the use of products belonging
to contract manufacturers, without investing much capital.
These are mostly cheaper alternatives to more well known brands, but they have now began competing with some of the biggest brands worldwide. Smart branding strategies need to be adopted by retailers who want to gain part of the current world market.
Growth of the drop shipping private label indicates that the advantage of the higher priced international brands is slowly diminishing because of this unique sales opportunity for smaller retailers. This is a good time for ecommerce retailers to experiment within this space, as consumers seem to be switching more and more to private label brands.
Private Label Categories
Almost all consumer goods are benefiting from established brands and private label offerings. The overwhelming growth of private label brands include Cosmetics, Confectionery, Personal care, Pet food care, Non-alcoholic drinks, Household, Ambient food (shelf-stable food), Frozen food and Chilled and fresh food.
Private Labeling Advantages
Drop shipping private label products have become immensely popular to online retailers because of the numerous advantages they offer
Pricing Control – Retailers determine the cost of a product and set the
Branding Control – Retailers have the final say about where, when and how private label products will be marketed since they bear their brand.
Higher Production Control – Retailers input more into the design, materials, product quality and ingredients, depending on their contract with the manufacturer.
Higher customer loyalty – Customer loyalty is boosted when private label products are successful. This also raises brand awareness for the retailer.
Staying nimble – With private label products, smaller retailers are able to quickly respond to market demands and trends with their swift decision making ability and low entry barriers.
Private Labeling Disadvantages
Disadvantages of private labeling are few compared to the advantages, but nevertheless should still be considered.
Competing against the more well established and well known brand names can be difficult, even though customer loyalty has increased through private label branding. Branding budgets are no match for the big boys! Private label products are also limited to your store compared to
well-known brands which are available everywhere.
Dependency on a single manufacturer is a problem. If you are partnering with only one manufacturer, you are at financial risk should they experience any business issues which keep them from delivering products on time or diminish the quality of their products. Partnering with more than one manufacturer may be the solution to this dilemma.