Secure Vendor Help Before Private Labeling

One of the main advantages of selling private brands or labels is the control distributors will gain over their products compared to the national brands that they currently sell.

“A lot of times, distributors are tired of competing with the national brands, and someone in the town over is selling the same brand and they are competing with one another and they are racing to zero as far as their margins go,” says Caswell. “So by creating a brand, they are creating something that is unique to their distributorship.”

Although aligning with national brands has its benefits, distributors are at the mercy of short- and long-term decisions made by national brands, which could have negative impacts, says Caswell.
 
“With a national brand, you are dealing with one company and that is your source of material,” he says. “With a private brand, you can interject more than one manufacturer to create your own brand. So what used to be considered a substandard brand can be marketed as a premium brand.”

Distributors need to determine what product or line of products they will make private. This will include considerations around product mix, packaging, formulation and pricing, such as how many units to package together and what discounts on volume distributors will make available.
 
It makes the most sense for jan/san distributors to consider private labels or brands for their best-selling items.

“Make sure the quality of the products is where it needs to be to be able to compete with that household brand name that you have sold forever,” says John Patton, sales and marketing manager at Athea Laboratories, Milwaukee.

Distributors may also decide to market different private brands to different market segments, says Wunderlich.

“There are distributors that have more than one private brand offering, possibly because there may be a competitive bid situation where they offer a line for bids and yet they don’t want to take their premium brand line and offer it at lower pricing,” says Wunderlich. “Or they may just have different brand names that make sense for various product lines or industry segments. There are any number of ways you can approach the market.”

Vendors also play a large role in distributors’ success with private labeling, says Patton. Distributors should team with manufacturers that can support their initiatives with such tasks as labeling and literature development, he says.

Distributors should focus on brand and product name creation and label design, says Caswell. Manufacturers typically can assist in these areas with their own graphic artists along with marketing and sales staffs.

“You want a brand that is eye-catching. You want a brand name that people will remember,” says Caswell. “It makes it all the more important to work with a manufacturer that is experienced in those areas. That’s very important.”