A Retailers Guide to Developing Private Label – Essential Tips

by • December 22, 2015 • Retail News, Small Business MarketingComments Off on A Retailers Guide to Developing Private Label – Essential Tips10513

Demystify the steps you need to take in order to start your own private label, it’s easier and more profitable than you think!

Private label brands are a significant player in today’s U.S. retail landscape, reaching $112 billion out of $643 billion in total retail sales as recently as 2013 (Nielsen).  Should you start private label for your shop as well?  The answer is a resounding, “yes,” especially if you take your time to find the right partners and test small quantities first.

Definition: Private label is when a retailer purchases products from various manufacturers and then markets those products under its own brand (reference Encyclopedia for Business)

Private Label is the Future for Independent Shop Owners

Most retailers think private label is just for large chains, but it’s actually the wave of the future for smaller shop owners. Profit margins are usually much higher on private label goods and the promotion you receive can expand your store brand well beyond a local customer base. Here are some tips to get started quickly and easily – the barrier to entry is lower than you think.

1. Decide on the product you want (and love), find your supplier partners.


Many retailers go to trade shows and assume the exhibitors just sell their own branded product. Not so. At B2B trade events like ASD Market Week many of the vendors also do private labeling.

First ask yourself, “what type of product do I want to develop?” If you’re undecided or need inspiration, just walk the trade show for ideas and vendors already making product you like that fits your customer.   Once you see inspiring, well-executed product, inquire if the vendor also manufactures private label for that product. The answer is most likely, “yes.” If it’s apparent they execute well, you can also ask if they can also create a product especially for you.

Insider Tip: At ASD Market Week you can find suppliers that already have completed unique product and can do the design and fulfillment for you. This way there is no need to hire anyone in-house or take on inventory.

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2. Develop a business relationship with your chosen vendor/supplier.

The beauty of working with a vendor that already has product you love is that you don’t need to hire a team of designers. You just need to build the right relationship with your supplier. Developing private label this way is turnkey, and there is no need to hire your own design team or take on overhead, and you save big on upfront costs.

Key elements of your business relationship

  • Exclusivity – agree that no one else will be selling the same private label product
  • Profit split – research competitors and similar product to establish a reasonable wholesale price
  • Budgeting and scheduling – a manufacturer can help you put together a marketing budget, research, design, branding, timelines, and production schedules
  • Choose packaging elements together
  • Agree to test small sample quantities first to reduce risk

More than anything you want to build a business relationship with a partner that is easy to work with, professional, collaborative, and executes well.

Download ASD’s Ultimate Guide to Private Label – It’s Free!  You’ll Learn The 5 Steps to Launching a Private Label Brand – For Small to Medium-Sized Retailers.

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3. Think small to go large. Test and promote small quantities first.


Now that you have a great vendor supplier and exciting product in place, it’s time to bring it to market.  The best way to do this is to place a small ‘test’ order with your supplier. Testing your new product without placing a huge order is cost-effective and is the best focus group money can buy.

Promote your product

Place your new, branded product on your store shelves and showcase the product on your website and social media channels. Also, feature the product in your broadcast email campaigns and in your media outreach. Here are some social media tips to get you started and ways to engage your target customer online.

One of the best parts of developing limited runs is that they “sell out” quickly, enhancing demand and perceptions of exclusivity. Showcasing your new product in your shop and on your website also allows you to build relationships directly with your customer.

By taking a ‘test’ approach with the right vendor partner, you can enter the private label world at relatively low cost and grow the business together.

Insider Tip: Remember to keep a balanced mix of your own label and the established brands you’ve been so successful with.

4. Scale up. Plan your longer term product marketing strategy.


How did it go? After you have collected some test data and in-person feedback on your product from your store customers, you can confidently plan how to scale up your efforts. Collaborate with your supplier to develop an effective marketing plan by answering the following questions;

  • Who is our target customer? Who are we selling to?
  • Does the identity of the product fit my store brand?
  • Do we need to change anything?
  • How are we going to market the product?  in stores, on our website, on social media?
  • What is the branding of the packaging (the look and messaging)
  • How big should our next order be?


With the right agreement and pricing in place, your vendor partner can handle the order fulfillment as well.  The supplier can ship to each individual purchaser, thus saving you costs related to warehousing and inventory.  This plugs right into your e-commerce fulfillment, streamlining the process from manufacturer to consumer.

Your Customers Will Love You

Consumers always want something different. Private label is about diversifying your product and building a unique brand your customers will love. Setting your store apart from the competition is essential, and private label can do that for you. You’ll also build long-term, loyal customer relationships in the process.

Ready to start your own private label brand to sell wholesale? Find a great partner at the next ASD Market Week — March 11-14, 2018 in Las Vegas — featuring 2,600 on-trend accessories and general merchandise vendors all under one roof.

By Jed Wexler

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