Private label products are manufactured by 3rd parties and packaged by them to be sold under retailer’s brand names. A lot of e-commerce that you see today is simply private labeling. Many stores and brands often only come up with the product idea, theme, design etc and do not really go into the details of actually manufacturing a product.
Since there’s almost always a 3rd party manufacturer available that aces at manufacturing a certain kind of product, it’s often easier, better and cheaper to source and PL the products by them instead of getting into the manufacturing business. The store can then simply sell the product that they only had to design, or in some cases only had to design the packaging for.
A few days ago, I went to the barber. He was quite disappointed with the state of the health of my hair and so he began the process to up-sell his hair oil product that he had private labelled.
He started by asking me how often do I use an oiling product for my hair. He then asked me if I can do it more often; daily for a week. Until this point he hadn’t introduced his product to me. He went further on, and showed me this perfect product that isn’t available for sale in the market. It’s a private product that can do wonders, he said. He then opened the bottle and made me smell it; it smelled incredible. From his perspective, everything was going great. But he messed up.
The bottle label sticker was a bit blurry. The printing quality wasn’t up to the mark. And so he lost my interest. I instantly decided that he is just selling this normal oil with a heavy markup by private labelling it that you can get from anywhere. But, could he have kept my interest intact if the label had better printing quality? I think he could have had my attention for slightly longer.
In fact, if the bottle was made of glass, appeared like a perfume more than the bottle of a hair oil, had super high quality label sticker, I might have paid twice the amount than the one he was looking to get from me. Because I may have led into believing that this actually is a really high quality product that is not available in regular supermarket.
In this day and age, there are products for every problem there is. There are products for potential problems, that could be. And there are also products marketing the solution by forcing you to believe that there is a problem, while there isn’t any. What sets you apart is how you private label, package and market one of these products. It is what gives you that leverage to charge that extraordinary markup.
They say don’t judge a book by it’s cover. But they said that because that is exactly what an average human does.