Private label products have been an essential component of the consumer industry and the economy in general. Although private labeling gained popularity in the 1980s, its rich history can be traced back as early as the 1800s.
Presently, private labeling has risen to prominence as one of the top options for sellers and entrepreneurs looking to enter the eCommerce industry.
If you want to establish your own private labeling business, this article serves as a guide to help you discover private label products, connect with private label manufacturers, and explore effective channels for selling your inventory.
What Are Private Label Products and How Does Private Labeling Work?
There are many ways to participate in the booming eCommerce industry. Apart from venturing into Amazon FBA or auctioning items via eBay, you can kickstart your eCommerce venture by selling private label products.
Private labeling is one of the most convenient ways to start an eCommerce business in 2023, as it helps you lower your startup costs and reduce stress at the very onset of your eCommerce journey. With private labeling, there is no need for you to immediately open a front office and hire employees to set up the product line for your brand.
The first step towards becoming a successful private label seller is to find winning products. Essentially, private label products are merchandise created by third-party manufacturers but marketed under the retailer’s own brand. The retailer or private label seller holds authority over various aspects of the products, such as specifications and packaging.
In its simplest form, a private label product refers to an item produced by one company but sold under another business’s brand name.
Some pioneering businesses that helped popularize private labels in the 19th century were Brooks Brothers, Macy’s, and Lord & Taylor. Dubbed as “palaces of desire,” these businesses offered private label goods at a fixed price below their competitors.
Since the private label products offered by the likes of Macy’s are priced less than brand-name alternatives, it gave consumers more economical options while becoming a “counter-inflationary force in the economy.”
Today, the private label business model has found new life, particularly in the field of eCommerce. eCommerce sites, especially Amazon.com, ushered in a more dynamic platform for private label businesses.
The private label model has become a popular choice for most Amazon sellers. It is estimated that more than 50% of Amazon sellers utilize the private label business model for their own brand and product line.
From a macro-perspective, Europe’s private label segment has the highest market penetration, between 20% to 50% of supermarket unit sales. While in the United States, the Private Label Manufacturers Association (PLMA) reported a growth of 11.3% in-store brand sales, reaching a new yearly high of $228.6 billion.
Considering growth rates and market penetration levels, it is safe to say that private label consumer goods perform better than some branded products. It suggests that consumers recognize that private label products can offer comparable or even superior quality and value compared to the national brands they used to buy.
How To Find Private Label Products
Finding a winning product for your private labeling business is crucial for success. To help you find private label products, here are some necessary steps you should take into consideration:
Perform Proper Market Research
Before you launch a product on the internet, you should see to it that thorough research and analysis have been done. It is best to conduct proper market research before investing in your private label product ideas, as it helps you save time, money, and effort.
Market research pertains to the process of evaluating the viability of your product, which allows you to know your customers, the market trends, and even your competitors in the market.
Conducting research helps you avoid costly mistakes. For instance, if you are new to private labeling or you are a small business owner transitioning to eCommerce, proper market research can provide you with critical information including but not limited to:
- Potential Total Project Cost
- Potential Profit Margin
- Possible Return on Investment (ROI)
- How Much a Customer Is Willing to Pay For Your Product
- How Your Competitors Price Their Products
There are many ways to conduct market research to help you improve your private label product ideas. The traditional method, often employed by big companies or corporations, is to hire a prominent market research firm.
However, if you are on a budget, you can utilize market research tools, software, and platforms that provide actionable insights, including the following:
Census Bureau: The Census Bureau offers useful information based on the U.S. census. With the help of the Census Bureau, you can identify potential target markets across the United States.
Qualaroo: This market research tool helps you understand your target audience through targeted surveys. Targeted surveys are vital to obtaining information from a specific audience.
Answer The Public: Answer The Public is a free-to-use market research tool that provides a set of adjacent topics and questions people are searching for about a particular subject.
Statista: This statistical portal for market information can provide reliable visual data, market research reports, and statistics for your private label business.
Qualtrics: Qualtrics is an all-in-one market research tool capable of creating advanced surveys to segment markets. It can also provide you with powerful recommendations to improve your research.
Pew Research Center: Pew serves as a free data source that provides a dataset by research area, including Global Attitudes & Trends and Social & Demographic Trends.
Google Trends: Google Trends provides you with insights and analysis on Google’s top search queries, which you can use to analyze the potential of your product ideas.
Use Product Research Tools
Another method to help you find the best private label products for your eCommerce business is to use product finder or product research tools. A product research tool can help you narrow down your choices of products for your eCommerce business based on specific filters.
Some of the popular options when it comes to product finder tools are the following:
SellerApp: You can use SellerApp to look for potential winning products online. SellerApp offers sellers and entrepreneurs premium features including but not limited to their database of over 100 million products and close to a billion data points, as well as real time-tracking of crucial product metrics.
AMZBase: If you plan to perform product research for your Amazon private label business, you can use this free product research Chrome extension. AMZBase is unique from other free Chrome extensions because it provides immediate access to other seller tools and platforms like Alibaba, AliExpress, eBay, and even the Google search engine.
CamelCamelCamel: CamelCamelCamel is a popular price tracker that can also be used as a product research tool, especially by newbie online sellers. It has features that can make your product research faster, and the best part is it is totally free. To use this product research software, you follow the steps below:
STEP 1: Go to its website, camelcamelcamel.com
STEP 2: Once you are on the website, you can search for a product using the Amazon ASIN number. However, using an Amazon ASIN number for product search is only ideal if you already have a specific product in mind and you simply want to further confirm its viability.
STEP 3: Alternatively, if you do not have a specific product in mind or you simply want to check more product ideas, you can use the “Popular Products” tab to give you various options for potential private label products.
Check Social Media for Trends
Apart from using private label seller tools to find winning products for private labeling, you can also use social media platforms to check for products that are gradually gaining popularity. Here are some social media platforms you should look into for trending items.
TikTok has introduced a new shopping feature that enables third-party sellers, brands, and content creators to showcase and sell products on their platform. Since products are showcased through in-feed videos and Lives, it quickly catches the attention of TikTok users worldwide.
You can utilize TikTok Shop to your advantage if you wish to check for trending products online. One notable method to search for potential winning products on TikTok is using TikTok hashtags.
Using the hashtag #TikTokMadeMeBuyIt, you can check what products are trending and resonate well with users. You should pay attention to the views, comments, and likes obtained by a particular product video, as it indicates shoppers’ sentiment towards the product being promoted.
Pinterest is another popular social media platform that you can use to check for trends and trending products. To find potential winning products on Pinterest, you can inspect the following:
Pinterest Trends: These features will give you insights into popular content on Pinterest. Pinterest Trends can show you a historical overview of top search terms and topics across multiple countries, including the United States, Canada, the United Kingdom, Brazil, Spain, and more.
Pinterest Predicts Report: Before the end of each year, Pinterest releases an insightful report known as Pinterest Predicts Reports. This report can help you identify the following year’s potential trends and winning products. For next year, you should be on the lookout for Pinterest Predicts Report 2024.
Explore Popular Pins and Boards: You can check for potential winning products through popular pins and boards. Examine popular pins and boards for products that attract high engagement. Analyze the discussions on these pins and evaluate the comments to understand consumer preferences better.
Instagram is another popular social media website that embraced eCommerce into its platform through its Instagram Shopping. Instagram Shopping gives business owners and entrepreneurs an immersive storefront that allows Instagram users to shop for various products and brands.
There are several ways through which you can leverage this social media platform for product research, and this includes:
Checking Hashtags: Similar to TikTok, you can also check hashtags related to your niche. Checking for relevant Instagram hashtags enables you to discover trends, find competitors, and gain insights about your target market.
Following Influencers: Influencers thrive on Instagram through product promotions. By following influencers, you can gain better insights into their content and the products they promote. Audiences’ responses to products that influencers promote give you ideas on how to improve your future products.
Monitoring Competitors: You can also use Instagram to check on your competitors and gain a perspective on how they use the platform for their products, including pricing strategies and consumer behavior. Having this relevant information can help you improve product research and marketing strategies.
Another effective avenue to help you find winning products and improve your product research is YouTube. This video-sharing social media platform showcases many video posts that can guide you to potential winning products.
In particular, top 10 videos, unboxing videos, and consumer reviews give you valuable insights into product features, pros and cons, and overall customer satisfaction. Additionally, with the help of these product video presentations, you can better understand how products are presented and initial user impressions.
Lastly, YouTube product videos also give you a glimpse of emerging trends. You should look for product videos or eCommerce-related videos with high views and engagement to give you an idea of popular products and categories.
Check Amazon for Product Ideas
Amazon offers numerous product ideas to help you decide which items are ideal to launch for your private labeling business. It is estimated that there are over 12 million items across Amazon categories.
There are many ways to find potential private label products on Amazon, and it includes the following:
Checking Amazon Suggest: Amazon Suggest is a valuable feature that helps you better understand what Amazon shoppers are looking for. To gain insights concerning Amazon Suggest, go to Amazon’s search bar and type in your initial product idea, category, or niche.
Amazon will then give product suggestions just underneath your search term. Sometimes, these suggested products do not even have their own category on the website, which means it is something new to the marketplace.
Checking Amazon Movers: You can also check the Amazon Movers and Shakers page. You can use this Amazon page to give you an idea for your potential private label product.
This page displays products trending on the website, including the biggest gainers in sales rank over the past 24 hours. Since it is an emerging trend, you will have a better opportunity to dominate that particular category or niche.
Checking Amazon Best Sellers: You can also check Amazon’s Best Seller list to help you find winning products or further improve your product research. This list showcases Amazon’s top-selling products within featured categories near real-time based on BSR scores.
Check Amazon Wish List: Amazon provides shoppers with a feature allowing them to list some of the products they want to receive as gifts. However, you can utilize this Amazon Wish List to get more ideas of what products most consumers want. Hence, expanding your list of potential private label products.
Attending Trade Shows and Industry Events
Despite easy access to inventory items online, you must also consider the advantages of face-to-face transactions. Attending trade shows and industry events is still highly suggested to give you additional options regarding potential winning products for your private labeling business.
When attending this type of event, visit booths and engage with exhibitors or private labeling manufacturers to learn more about their products and latest innovations.
You can stay up-to-date with the latest product developments by actively participating in trade shows and industry events. Furthermore, you can also gain more industry-specific knowledge, insights into consumer demands, and a clearer understanding of industry trends by attending industry events.
Consider Other Industries or Product Categories
When searching for winning products for your private labeling business, you should also seek inspiration from other industries or product categories. You can take one thing from other industries or product categories and put them together to improve your product idea.
Try to examine different thriving products or emerging trends in unrelated fields that possess comparable characteristics or address the same issue that your target market encounters. Evaluate whether there are specific product attributes or functionalities that can be incorporated into your own product concept.
Likewise, it is beneficial to investigate consumer preferences and behavior in other industries or niches to make necessary modifications to your private label product. Aim to enhance existing ideas and create a more innovative product that brings value to consumers.
Top 9 Private Label Categories Consumers Prefer | Private Label Products You Should Consider
Private label products were once considered generic alternatives to popular brands. However, consumers have become more open to buying private label items over the past years. Thus making private labeling a highly lucrative business model.
To give you an idea of what products you should develop for your business, here are the top 9 private label categories consumers favor.
Personal care is one category you should check for private label opportunities. It is estimated that almost 55% of consumers purchased private label personal care products.
Personal care products have already established traction in the private label industry, and you can leverage consumers’ familiarity with personal care products. Some popular private label products under personal care include shampoo, soap, and body cream.
Consider adding clothing and apparel items to your private label inventory, as they present a profitable opportunity. Approximately 55% of consumers have already made purchases of private label apparel, and about 24% have expressed their willingness to explore different types of private label apparel items.
If you want to embark on a private labeling business centered on apparel, you should look into jeans, T-shirts, socks, and underwear as your possible inventory items.
Footwear products are another ideal category you should consider for your private labeling business. Venturing into private label footwear products can be profitable, especially since more than 31% of consumers are willing to purchase private label footwear items, including but not limited to shoes, boots, heels, and slippers.
Beauty products continue to be in high demand among consumers, whether shopping on Amazon or other eCommerce platforms. Statistics suggest that over 30% of consumers have already purchased private label beauty products, and approximately 23% are open to buying such private label items.
Some popular consumer purchases for private label beauty products include facial cream and makeup. These products specifically fall under the cosmetic category. If you wish to venture into private label cosmetic products, you should know the laws governing cosmetic items, especially in the United States.
Although cosmetic products sold in the US do not require FDA approval, some laws and regulations still apply to cosmetics. The two most important laws pertaining to cosmetics marketed in the United States that you should be aware of are the Federal Food, Drug, and Cosmetic Act (FD&C Act) and the Fair Packaging and Labeling Act (FPLA).
There is definitely a market for private label pet supplies as consumers move away from overexposed national brands. It is estimated that around 31% of consumers have already purchased private label pet products, and 15% are planning to do the same. Some pet products for private label inventory may include eco-friendly pet shampoo, pet treats, pet wipes, and more.
Electronics is another category that consumers consider for private label products. More than 30% of consumers are open to the idea of purchasing private label electronics products. You can start with items such as batteries, ear pods, shavers, and other small gadgets for your private labeling business.
Handbags, backpacks, wallets, and belts are some of the products under the fashion category you can include in your private label brand. Over 35% of consumers are interested in private label products under the fashion category.
Another avenue to check for potential winning products is the home furnishing category. Some items you can include in your private label inventory under this category are bath towels, duvets, decorative pillows, and other products that provide consumers with stylish options for interior design.
Lastly, you can also check products under the fitness accessories category to include in your private labeling business. Products such as yoga mats, lifting belts & gloves, and elastic bands are some of your private label options.
You can take advantage of the growing popularity of home fitness exercises and sell your own private label fitness accessories. Venturing into private label fitness accessories would likely yield positive results since the home fitness industry is projected to increase to $14 to $21 billion by 2028.
How to Source Private Label Products? | Finding Private Label Manufacturers or Suppliers
Once you have narrowed down your potential private label items, you can now start searching for private label manufacturers or suppliers, depending on your need and business objective. Here are some ways to help you get in touch with potential suppliers or manufacturers for your private label brands.
Online Platforms and Directories
The easiest approach to finding private label manufacturers is to use online directories and B2B platforms. Technological advancement has made it much easier to communicate with potential suppliers, even those based overseas.
Some of the popular online platforms and directories you can check include. Alibaba, Global Sources, and DHgate.com. These websites have unique features and functionalities that make finding a supplier to attend to your private labeling needs quick and easy.
Depending on the product you are looking for, local manufacturers in your region may accommodate private label requests. Local sourcing has advantages like shorter lead times and accessible communication.
If you want to have a shorter lead time or quick access to a manufacturer’s factory to better understand its manufacturing process, you should consider local manufacturers in your area. For private label sellers based in the United States, you can explore some of these private label manufacturing companies outlined below.
Private Label Manufacturers in the United States
|Classic Caps & Embroidery||Custom Headwear||www.classicce.com/custom-headwear.htm||Texas|
|Sockprints||Custom-Branded Socks for Businesses||www.sockprints.com||California|
|David Oreck Candle Company||Candles||www.davidoreckcandles.com||Los Angeles|
|Private Label Select||Organic Skincare Products||www.privatelabelselect.com||New Mexico|
|Superior Supplement Manufacturing||Custom Supplements||www.superiorsupplementmfg.com||California|
|Tropical Products||Personal and Home Care Products||www.tropicalproducts.com||Massachusetts|
|Brushes by Karen, Inc.||Cosmetics & Brushes||Brushesbykaren.com||New York|
|Champion Brands, LLC||Engine and Motor Oils||www.championbrands.com/private-label||Missouri|
|Safetec of America, Inc.||First Aid Ointments & Sprays||www.safetec.com/private-label||New York|
|Daily Manufacturing||Personal Care Products||www.dlymfg.com/private-label||California|
|R.D. Alchemy||Non-toxic, Therapeutic (Natural) Products||www.rdalchemy.com/pages/copy-of-private-label-white-label-custom-form||California|
Social Media and Online Communities
When searching for a reliable private label manufacturer or supplier, you should also utilize social media platforms like LinkedIn and Facebook. These platforms can help you connect directly with manufacturers or suppliers of private label products.
Moreover, industry-specific forum sites like Reddit and Discord can provide industry-specific information while connecting you with other private label enthusiasts. You can expand your network and improve your industry knowledge by actively participating in these online communities and social media platforms.
Recommendations and Referrals
You can also ask other business owners from different niche markets to refer you to private label suppliers or manufacturers of good standing. Getting referrals from trusted sources can help you find reliable manufacturers and suppliers who have already proven their capabilities.
Pros and Cons of a Private Labeling Business
Knowing the pros and cons of private labeling can help you come up with better decisions that align with your business goals. Identifying the pros and cons of private labeling helps you mitigate or avoid potential risks and costly mistakes. It can also help you evaluate your capacity as a private label seller.
To refresh your perspective on private label selling on Amazon or other eCommerce sites, here are some of the pros and cons of the private labeling business you should consider:
Advantages of a Private Labeling Business
Control Over Product Branding: One of the key benefits of selling private label products is you have control over your branding. It means you can develop unique packaging, product design, and marketing strategies based on how you want to build your brand identity.
Better Profit Margin: Ordering directly from manufacturers or suppliers means obtaining products at a lower cost. Thus, giving you a higher profit margin compared to reselling established brands.
Pricing Control: Since you order directly from private label manufacturers, you can bypass third-party services that require additional costs. Lower production costs and decreased business expenses give you a competitive edge to adjust your product pricing according to your strategy that benefits your brand.
Disadvantages of a Private Labeling Business
Resources Needed: Unlike selling established or national brands, private labeling business requires a significant initial investment that will be used for product development, marketing, and distribution. Aside from resources, you should also have the necessary expertise to manage the critical aspects of the business.
Market Competition: Since private labeling has become popular, you should be prepared to face numerous competitors. It will always remain a challenge for private label sellers to consistently keep their products and brand unique among competitors.
Limited Control Over Product Quality: As a private label seller, you will often depend on third-party manufacturers for your inventory. As a result, you have less supervision over product quality. Finding a reliable and consistent supplier who can consistently deliver high-quality private label products continues to be a significant undertaking for private sellers.
Where to Sell Private Label Products
To maximize your success in the private labeling business, it is vital to know where you can sell your products. Here are some platforms to consider for selling private label products.
Online marketplaces are the most convenient places to sell your private label items. Popular options you can choose from include but are not limited to Amazon, eBay, and Etsy. These marketplaces already have an established following and infrastructures to make your private label selling activity more convenient.
Your Own Online Store
If you wish to avoid referral fees, monthly fees, and other fees associated with listing products on online marketplaces, you can opt to create your own online store. Having your own eCommerce website means complete control over your branding, customer experience, and product pricing.
Social Media Platforms
If you are on a tight budget, you can still proceed with your private labeling business by selling on social media platforms. Instead of paying for platform monthly fees, you can showcase your products on Facebook, Instagram, and even TikTok.
To be successful in this approach, you should build a community online and engage with viewers or followers. Once your business picks up, you can decide whether to sell on Amazon or develop your own online store.
Start Your Private Labeling Business Today
Private labeling allows you to showcase your unique ideas and establish a brand that connects with consumers. Additionally, it also provides flexibility in inventory management, enabling you to offer products that reflect your entrepreneurial values.
Beyond improving your understanding of private label products, the insights and tips mentioned above aim to boost your confidence to take the first step toward entrepreneurial success. Start selling your private label products today.