Unique Products Improve Profit Margins

Conversely, when it comes to less frequently purchased supplies, like mops and microfiber, some distributors don’t have the volume to warrant a private label, while others choose to delay branding these items.

“Mops and microfiber were the fourth or fifth type of product we tackled — after we got past the simple ones,” says Huizenga. “So first pick your high-volume items that you sell the most of.”

Imperial Dade waited until 2016 to private label microfiber in response to the growing green cleaning movement. 

“When we first introduced it, people were skeptical,” says Craven. “Now it’s become mainstream, so it was one more category to add and the next logical step.”

For Linda Silverman, president of Maintex, City of Industry, California, private labeling mops presented more of a challenge than paper or liners for different reasons: Less transparency and more variations to contend with.

“In terms of size and weight, mops are all over the board,” she says. “You don’t always know the exact dimensions. So as a company you have to define your large and decide how large you want your large to be versus someone else’s large.” 

Silverman admits private label chemicals are still the most profitable for Maintex; however, she believes that growing a private brand across multiple product categories is important.

 “At the end of the day, that’s the differentiator,” says Silverman. “It enables you to show your unique capabilities, and it gives you the ability to develop better margins because you’re not competing with the exact same item against myriad competitors.”

Same, But Different

Although a private label can give jan/san companies an edge, distributors still face some of the same challenges they have when selling national brands.

“It’s a commodity, and with commodities margins come down,” says Josephs. “At the same time, distributors tend to be able to make more margin points with a private label program across the board.”

To further differentiate a private brand, Josephs recommends making minor adjustments that will set the product apart from the competition.

“Have the manufacturer that’s going to private label a product for you change the specifications slightly so that it’s more unique,” says Josephs. “For example, instead of having a 60-foot cord on floor machines, like most companies, our private label machines have a 75-foot cord. Anytime you can make a slight modification, that’s a big help in the private label world.”

It’s also imperative that distributors maintain product quality — particularly when rolling out a private label across multiple product categories.

“The most important thing is finding a partner you can trust to make your products — that’s the ‘secret sauce,’” says Josephs. “Once you put your name on something your reputation holds to it. So if something goes wrong, the manufacturer’s name is no longer prevalent on the product. You have to be mindful of that.” 

Kassandra Kania is a freelance writer in Charlotte, North Carolina. She is a frequent contributor to Sanitary Maintenance.