The 5 Hardest Parts About Selling Private Label

With more control also comes more responsibility. Private Label is the future and the industry is growing at around 5% year-on-year, last week I wrote about this very topic! Launching private label products can seem like quite an overwhelming process to take a product from ideation to store shelves all around the world. During this process everyone faces critical choices that will have serious repercussions on lead times and the affordability of a product. 

Though these tasks may seem quite complex on the outset once you familiarise yourself with the process the simplicity will become evident. If any of the below tasks sounds too overwhelming then you're in luck, The Private Label Lab offers a complete offer of services all the way from design to the very end of distributing your product. Get in touch with us and we would be happy to assist with your private label needs. So lets dig into the more popular reasons why going Private Label may seem a bit discouraging.

 

1. Finding people to design your label and packaging

Product design for label and packaging

The hardest part for retailers and online sellers is to design the brand image that aligns with the position of their product. Creating a brand image in many ways is just as important as the ingredients of the product if not more so. For many, products brand perception can significantly outweigh the negatives that a product may have so it is important to nail your brand design from day one. There are some really great design sites, like the The DieLine, and newsletters out there that will show you what is happening in the industry. If you want product design on the go then have a look at Design Hunt for iOS and Chrome, I always have a flick through on my way to work. These two resources will give you the first glimpse into product design and maybe give you some inspiration for a new product brand.

Design firms all over the world compete to have their product to stand above the rest and so should you. Coca-Cola for example had their very successful campaign changing their label to personal name tags. If one of the largest beverage companies in the world is able to change fundamental parts of their label design and brand then so can we!

 

Image Credit : Coca-Cola

Image Credit : Coca-Cola

 

If your premium then you need a premium design, right? Well what about your target market? Maybe their perception of what premium looks and feels like is completely different to yours. Do your due diligence and find out what the market will respond to. 

 

2. Always do your MARKET RESEARCH

Finding out what your market wants and how they will respond to your product can be quite the challenge. It is always best to do your due diligence before launching a product into the market to minimise risk of failure. There are some really great inexpensive forms of market research outside of focus groups or forcing your product down the throat of consumers with huge marketing budgets. Being active online in places where your target market would congregate is a great start. If you're unsure of where that might be always head to Reddit and chase up active members in sub-reddits that relate to your product. 

Trying to get the product to the market before the trend ends is one way to enter but getting in before the trend begins is a whole different game. Looking for consumer reports can be expensive but can sometimes be worth it. Certain reports like that at IBIS World and Mintel can provide some great insights into growth opportunities. Knowing the size of your market and its rate of growth could save you a lot of wasted investment!

 

3. Getting approval for nutritional information - Lawyer or no?

No matter where in the world you plan to launch your product you will require nutritional information on your product. Every country region and sometimes states will require different laws on what you provide in the nutritional table. Certain ingredients may be banned from a certain country for example or information that you thought may need maybe unnecessary. 

Either be prepared for a large amount of research or find yourself a good food lawyer. A specialised food lawyer will help you validate your product in every and any market you are looking to sell in. Food lawyers will primarily work towards the compliance of your nutritional information. They will sort out if your percentage of ingredients fit the laws and regulations of each market. Perhaps your caffeine content is too high for a certain market for example, so it is always better to be safe than sorry and to have your labels checked. 

Another reason you may want a lawyer is if you're making claims on your packaging that your product is 100% organic or high in calcium then this needs to be supported by the actual ingredients. The lawyer will validate within each region and the proper regulatory bodies to see if your product qualifies within standards or a particular classification. 

 

4. Navigating regulations and distribution laws - Finding a MANUFACTURER

The world of regulation laws can be quite complex, especially so if you're selling within several regions at once. For many products standard regulatory laws will be quite similar for various regions. Although alcohol for example in the USA can be a very complex mine field of federal and state regulation to navigate. When shipping your products it is best to understand the following regulations and laws that will influence your decisions:

  • Labelling and images placed on the bottle
  • Nutritional panel and percentages of controlled ingredients
  • VAT, GST, sales tax and tariffs
  • Packaging regulation - materials used, or weight of the case for example

Teaming up with a manufacturer that you can trust and that has a solid understanding of the regulations in your key markets is a great way to keep cost down. If they have been in the business for long enough then they will know well the regulations of each market and what needs to be done to meet them. Take this into account when you find your manufacturer, a good relationship with a respectable company will save weeks of headache. 

 

5. Freight management

When product is coming out the other side of the factory and it is ready to go you need to decided how to get it from point A to B. These type of terms would have been negotiated from the outset. Decide what is best for you product and how to keep your distribution affordable There are three primary shipping processes that you need to know and their corresponding Inco terms:

  1. Ex-Factory or Ex-works - the price of your product not including taxes or any other cost. Your product will be produced and it will sit in the factory until you come and pick it up. In this circumstance, freight is solely your responsibility. Pro tip: Suppliers may quote this for the simple fact it will be appear to be the cheapest option and that is for the simple reason that no freight has been factored in.
  2. Free on Board (FOB) - Your manufacturer will deliver your product to a port of your choosing and load into your ship, you will then pay all costs from there on out including the shipping cost getting it to the port of your select market.
  3. Free Into Warehouse (FIW) - Under this agreement the manufacturer will pay for the full shipping of the product to your port of choice. This may seem like the obvious option but be aware of the premiums associated with not being able to choose your own shipping company.

Regardless of what you choose make sure you have good account management or a freight forwarder in place. Weekly status updates should be the minimum. In an ideal world you will have a great freight forwarder that will handle most things and give you a nudge when any paperwork is required to clear customs.

The Private Label Lab 

We are here to be one stop shop for everything you could possibly need for sourcing private label products. We are constantly delivering products from design to delivery through our shipping partnerships. Our capabilities stretch from everything listed above and more, anything you may need for your private label product shoot me an email and I would be happy to chat, sam@privatelabellab.com.au