Over the years, the concept of private labeling has become a lucrative and viable business. Private labeling is a process in which a supplier or retailer owns a label or brand of products that are manufactured or produced by other companies, which is also sometimes referred to as original equipment manufacturer service(OEM service). For example, in electronics industry, it is also sometimes known as electronic manufacturing services. Privately labeled products are comparatively cheaper than the well-known international or national brands. Therefore companies use private labeling as a business model to increase profit margins. Amazon private label is also a trend now since there are more e-commerce business owner hiring China sourcing agent for Amazon product sourcing and to fulfill private label for the products that they are selling online.
Some Advantages of Private Labeling
Apart from procuring a profit margin of 10%, there are several other benefits of private labeling business models.
- Power of a unique and distinctive logo and brand name
- Absolute control over market elements such as price, distribution and sales
- Absence of middlemen while dealing with product manufacturers
Although there are plenty of benefits in private labeling business, it is not free from risks. Though it might appear easy enough, there are many hurdles and bottlenecks involved in this business. One of the biggest obstacle in your path as an entrepreneur is finding the best private label manufacturers for your product. Additionally you may also face challenges in day to day operations with changes in the price of raw materials, sourcing products, quality assurance and so forth.
Private Label Manufacturers
Every manufacturer specializes in different fields. So it is essential to know which manufacturer is able to create products and labels that align with your specific requirements. Sourcing manufacturers for your products is no easy task. There are several aspects to consider before you zero in on any specific private label manufacturer.
Choosing the right manufacturer for your business depends on the type of products you plan to sell. You need to find manufacturers that produce high quality products at lowest possible prices. There are several other aspects to consider while choosing manufacturers. It includes the following:
- Negligible or no damage and defects on products
- Prompt delivery
- Lowest prices
- Top notch quality
- Low transit cost
Why to Choose Private Label Manufacturers in China?
China is known to be the largest manufacturer of all types of products in the world and most of the merchandise is import from China. This is mainly due to the fact that China has a large working population and various small as well as large scale industries. Majority of the products are exported to different countries all around the world at a comparatively lower price.
Secondly Chinese manufacturers and suppliers are generally quite flexible. You can easily procure customized products and labels that align perfectly with your requirement. However, it is to be noted that there are no manufacturers and suppliers who are totally focused on any specific product. All the products are based on “make to order” principles, which mean that you need to provide the exact specifications and product descriptions to help them manufacture your product. These manufacturers hardly develop their own products. Majority of the products that are exported are specifically made for customers based on company requirements.
Most of the suppliers in China are used to customization approach and therefore you need to provide a comprehensive specification for labels and products. There are various aspects that must be included in your logo or brand which are colors, type of print, position of print, files, artwork and so forth. Ensure to give a detailed spec on how you want your logo to appear on your product package.
Even though there are many hurdles and challenges involved in choosing private label manufacturers in China, most entrepreneurs and businesses consider it worth the risk mainly because it is affordable. Moreover, websites such as Alibaba serve as an excellent platform to locate manufacturers in China. It also saves a lot of hassles involved in private labeling business.
Tips to Choose Private Label Manufacturing in China
Renowned all around the world for its manufacturing prowess, China has emerged to be the foremost country that exports trade goods worth billions of dollars to the United States. So finding a high quality, reputed and reliable private label manufacturers in the country is tantamount to searching for a needle in a haystack.
Majority of the businesses use innumerable ways to reduce production costs and increase overall profit. This can be achieved solely by outsourcing production to China. It takes ample amount of time and effort to find and vet manufacturers and suppliers that align with your requirement. Although it might seem like an easy task, in reality it is quite cumbersome.
There are several facets to consider while choosing private label manufacturers in China. Some of them are as follows.
There are many online websites that list a plethora of manufacturers and suppliers with star rates. Some of the most prominent sites are Alibaba, Global Sources, Global Market and so forth. Though most of these sites have a wide and variety list of suppliers, there is no assurance provided. None of these sites offer any guarantee regarding the authenticity of these manufacturers. However, sites such as Global Sources tend to showcase reliable manufacturers as they have a standard scrutinizing process.
Some companies offer the lowest price for products, although you might feel tempted to accept the offer, it is undoubtedly a wrong choice. True, China has a low cost of labor but if you find a supplier or manufacturer who offers the lowest price, be wary immediately. Low cost products exhibit low quality more than often because the company uses inferior quality raw materials.
Chinese manufacturers conduct fairs throughout the mainland of China. It is considered to be the best method find top notch manufacturers that deliver high quality products at affordable price rates. However, you will need to travel to China to meet these manufacturers and evaluate them in person.
As English is not the native language of the country, most of the suppliers and manufacturers find it a tad difficult to understand your product specifications and other details in long mails. Emails with product specifications must be short, brief and precise. This makes it easier for them to comprehend your requirements and manufacture products accordingly. Majority of the companies in China manufacture bespoke products. So it is essential to give a simple list of your requirement in easy English, most preferably in bullet or numbered list.
Another indication of a reliable and high quality manufacturer in China is based on their exports to countries such as the United States. A factory that exports to US requires a pre-defined standard to export products. So you can choose manufacturers who export products to US. Be sure also choose a good China freight forwarder so you can make it easier for shipping from China to US.
Visit factory premises
You can also choose manufacturers after a personal visit to the premises. As there are thousands of factories that operate from China, it is impossible to know the legitimacy of these factories without a proper background check. Most of these factories exude the impression of a large and well established company to gain your trust and business.
Once you have chosen good quality private label manufacturers in China, request them to send you 10-50 sample products for verification. A single or double sample piece can seldom show you the big picture of their products as companies ensure that sample pieces are the best while final products can be a disaster. So ensure to order a small bulk of products for better evaluation at a lower price.
Know your product precisely
Before you choose to outsource your product, you need to know your products in depth. Conduct researches on products and procure relevant information pertaining to manufacturing process, type of raw materials used and the time required for completion of the product.
Finding quality private label manufacturers in China might prove to be a novel experience for many entrepreneurs and businesses. It is not easy to locate a good quality private label manufacturers and supplier in China that aligns with your requirement. It requires experience and professional assistance to choose quality private label manufacturers. Nevertheless, there are reliable and authentic companies in China that offer excellent services in private labeling business at affordable prices.