Terms

Private Labeling

Private labeling is the practice of a company selling products manufactured by a third party under its own brand name. In this model, the retailer typically controls the product's specifications, branding, and marketing, while the manufacturer is responsible for production. These products are then sold exclusively by the retailer, often as store brands that compete with established national brands.

Benefits of Private Labeling

Private labeling offers businesses significant advantages. It allows for greater control over product design, branding, and pricing, leading to higher profit margins. By offering exclusive products, companies can differentiate themselves from competitors and build strong customer loyalty. This model provides the flexibility to adapt quickly to market trends.

Steps to Start Private Labeling

This is how you can launch your own private label product line.

  1. Research your market to identify a profitable product niche and define your product specifications.
  2. Find and evaluate potential manufacturers by checking their production capabilities, quality control, and minimum order requirements.
  3. Request samples from your top choices to test product quality before negotiating terms and signing a contract.
  4. Develop your branding and packaging, then launch your product with a solid marketing strategy to attract customers.

Private Labeling vs. White Labeling

While often used interchangeably, private and white labeling serve different business needs.

  • Private Labeling: This involves creating a unique product exclusively for one retailer based on their specifications. It offers exclusivity and higher margins but can require larger minimum orders. Enterprises use this to build powerful store brands, while mid-market companies leverage it to create unique products and differentiate themselves from competitors.
  • White Labeling: This model applies a brand to a generic product sold to multiple retailers. It allows for a quick market entry with lower upfront costs but lacks exclusivity. Enterprises use it to rapidly expand product lines with minimal risk, while mid-market companies find it useful for testing new categories without investing in custom development.

Challenges in Private Labeling

Private labeling presents unique hurdles. Businesses must navigate reliance on third-party manufacturers, which can lead to production delays or quality control issues. Additionally, building a new brand from the ground up requires significant investment and effort to gain customer trust.

  • Dependence: You are reliant on your manufacturing partner for quality and timeliness. Any production delays or inconsistencies can directly impact your inventory, customer satisfaction, and brand reputation.
  • Inventory: Manufacturers often require large minimum orders, which can be a significant upfront cost. This creates the risk of dead inventory if the product doesn't sell as expected, tying up capital.

Trends in Private Labeling

Private labeling is evolving far beyond its origins as a low-cost alternative. The market is experiencing significant growth, with store brands expanding into new categories and gaining substantial market share. This shift is driven by changing consumer perceptions and new opportunities for businesses of all sizes.

  • Growth: Sales are surging as major retailers expand their private label offerings across diverse product categories.
  • Premiumization: Brands are increasingly offering high-quality, premium products that compete on quality, not just price.
  • Accessibility: E-commerce and online manufacturing directories have lowered the barrier to entry for smaller businesses.
  • Customization: There is a growing demand for unique, customized products that help brands stand out from competitors.

Frequently Asked Questions about Private Labeling

How do I find a reliable manufacturer?

Research online directories, attend industry trade shows, and vet potential partners thoroughly. Check their certifications, production capacity, and client reviews to ensure they meet your quality standards and can scale with your business.

What are the typical profit margins for private label products?

Profit margins vary widely by industry but often range from 20% to over 40%. By controlling production costs, branding, and pricing directly, you can achieve significantly better margins than you would by reselling established brands.

Is private labeling legal?

Yes, private labeling is a completely legal and standard business practice. It operates on a contractual agreement between a manufacturer and a retailer. Ensure your contracts clearly define intellectual property rights, quality control standards, and liability terms.

Other terms

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Omnichannel Sales

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Mobile Optimization

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On-premise CRM

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B2B Sales Process

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B2B Sales Process

Cold Emailing

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Cold Emailing

Target Account Selling

Target Account Selling is a focused sales strategy where teams identify and pursue a specific list of high-value accounts.

Target Account Selling

Customer Acquisition Cost

Customer Acquisition Cost (CAC) is the total cost a business spends to gain a new customer. It includes all sales and marketing expenses.

Customer Acquisition Cost

Proof of Concept

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Proof of Concept

Customer Buying Signals

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Customer Buying Signals

LPI

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LPI

B2B Sales Channels

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B2B Sales Channels

Account-Based Analytics

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Account-Based Analytics

Forward Revenue

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Forward Revenue

Messaging Strategy

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Messaging Strategy

SFDC

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SFDC

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Big Data

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Big Data

Intent Data

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Intent Data

Trusted Advisor

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Trusted Advisor

Account Executive

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Account Executive

Request for Quotation

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Request for Quotation

Business Intelligence

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Business Intelligence

Firewall

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Firewall

User Interface

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User Interface

Load Balancing

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Load Balancing

Copyright Compliance

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Copyright Compliance

Objection Handling

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Objection Handling

Awareness Buying Stage

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Awareness Buying Stage

Discount Strategies

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Discount Strategies

On Target Earnings

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On Target Earnings

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Psychographics

Sales Partnerships

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Sales Partnerships

Demand

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Demand

Buying Criteria

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Buying Criteria

Cloud-based CRM

A cloud-based CRM is a customer relationship management tool hosted online, letting teams access and manage customer data from anywhere.

Cloud-based CRM

Sales Playbook

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Sales Playbook

Site Retargeting

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Site Retargeting

Challenger Sales Model

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Challenger Sales Model

Conversion Path

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Conversion Path

Touches

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Touches

Payment Processors

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Payment Processors

Lead Enrichment Software

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Lead Enrichment Software

Buyer Journey

The buyer journey maps the path a potential customer takes, from first learning about a product to the final decision to buy.

Buyer Journey

Customer Churn Rate

Customer churn rate is the percentage of subscribers or customers who cancel their service with a company during a given time frame.

Customer Churn Rate

Lead Qualification

Lead qualification is the process of determining which prospects are most likely to become paying customers based on predefined criteria.

Lead Qualification

Revenue Operations KPIs

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Revenue Operations KPIs

Warm Email

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Warm Email

Brand Awareness

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Brand Awareness

Incident Response

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Incident Response

B2B Marketing Channels

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B2B Marketing Channels

Shipping Solutions

Shipping solutions are services or software that streamline the logistics of getting products to customers, from label printing to final delivery.

Shipping Solutions

Account-Based Sales Development

Account-Based Sales Development (ABSD) is a focused strategy where SDRs target key stakeholders within specific, high-value accounts.

Account-Based Sales Development

Positioning Statement

A positioning statement is a concise description of your target market and how your product or service uniquely fills their needs.

Positioning Statement

Amortization

Amortization is the process of spreading out a loan or the cost of an intangible asset over a specific period for accounting and tax purposes.

Amortization

B2B2C

Learn about B2B2C, including benefits of B2B2C model, key strategies for B2B2C success, & B2B2C vs. B2C vs. B2B: understanding the differences.

B2B2C

Video Prospecting

Video prospecting is the sales technique of sending personalized videos to potential customers to grab their attention and secure more meetings.

Video Prospecting

Representational State Transfer Application Programming Interface

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Representational State Transfer Application Programming Interface

Marketing Intelligence

Marketing intelligence is gathering and analyzing data about your market, customers, and competitors to inform strategic marketing decisions.

Marketing Intelligence

B2C2B

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B2C2B

Lead Enrichment Tools

Lead enrichment tools are platforms that automatically add missing data to your leads, like contact info, firmographics, and buying signals.

Lead Enrichment Tools

Point of Contact

A Point of Contact (POC) is the designated individual or department that serves as the main hub for information and communication on a matter.

Point of Contact

Branded Keywords

Learn about branded keywords, including identifying your branded keywords, & strategies for optimizing branded keywords.

Branded Keywords

Sales Pipeline Management

Sales pipeline management is the process of organizing, tracking, and managing potential deals through every stage of your sales funnel.

Sales Pipeline Management

Electronic Signatures

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Electronic Signatures

Cost Per Click (CPC)

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Cost Per Click (CPC)

C-Level or C-Suite

The C-suite, or C-level, refers to a company's most senior executives. Their titles usually start with 'Chief,' such as CEO, CFO, or CTO.

C-Level or C-Suite

Value Chain

A value chain is the series of business activities required to create and deliver a product or service, from conception to the final customer.

Value Chain

Digital Rights Management

Digital Rights Management (DRM) is technology that controls access to copyrighted digital content, restricting its use, modification, and distribution.

Digital Rights Management

Virtual Selling

Virtual selling is the process of selling to customers remotely using technology like video calls, rather than meeting them in person.

Virtual Selling

Closed Question

A closed question is a type of query that elicits a simple, often one-word answer like 'yes' or 'no,' or a specific, factual response.

Closed Question

Target Buying Stage

The Target Buying Stage identifies a prospect's position in the buying journey, from initial awareness to the final decision to purchase.

Target Buying Stage

Stakeholder

A stakeholder is any individual, group, or party that has an interest in an organization and the outcomes of its actions.

Stakeholder

Content Rights Management

Content Rights Management involves controlling the use and distribution of copyrighted digital media to protect intellectual property.

Content Rights Management

Net Revenue Retention (NRR)

Net Revenue Retention (NRR) is the percentage of recurring revenue kept from existing customers, including upsells, downgrades, and churn.

Net Revenue Retention (NRR)

Data Warehousing

Data warehousing is the process of storing and managing large sets of data from various sources for business intelligence and reporting purposes.

Data Warehousing

Sales Pipeline Velocity

Sales pipeline velocity is a metric that measures how quickly deals move through your sales funnel to generate revenue for your business.

Sales Pipeline Velocity

Sales Enablement

Sales enablement provides sales teams with the necessary tools, content, and information to help them sell more effectively and efficiently.

Sales Enablement

CRM Data

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CRM Data

Analytics Platforms

Analytics platforms are tools that collect and analyze data from various sources, helping businesses track key metrics and make informed decisions.

Analytics Platforms

Triggers

Triggers are predefined conditions that, when met, automatically launch a workflow or action, ensuring timely and relevant outreach.

Triggers

Account-Based Marketing

Account-Based Marketing (ABM) is a focused B2B strategy where marketing and sales collaborate to target and convert high-value accounts.

Account-Based Marketing

B2B Intent Data

Learn about B2B intent data, including how B2B intent data enhances sales strategies, sources of B2B intent data, leveraging B2B intent data for competitiveness.

B2B Intent Data

Cloud Storage

Cloud storage is a service model where data is stored on remote servers and accessed from the internet, rather than on a local drive.

Cloud Storage

After-Sales Service

After-sales service is the support provided to customers after they've purchased a product. It includes things like warranties, training, or repairs.

After-Sales Service

Demographic Segmentation in Marketing

Demographic segmentation divides a market into groups based on traits like age, gender, and income, allowing for more targeted marketing efforts.

Demographic Segmentation in Marketing

Sales Strategy

A sales strategy is a comprehensive plan that outlines how a business will sell its products or services to achieve its revenue goals.

Sales Strategy

SPIN Selling

SPIN selling is a sales technique using a sequence of questions—Situation, Problem, Implication, Need-Payoff—to uncover a buyer's needs.

SPIN Selling

ETL

ETL, short for Extract, Transform, Load, is a data integration process for moving raw data from various sources to a central data warehouse.

ETL

Channel Sales

Channel sales is an indirect sales model where a company leverages third-party partners, such as resellers or affiliates, to sell its products.

Channel Sales

Sales Sequence

A sales sequence is a series of automated touchpoints sent to prospects over time to guide them through the sales funnel.

Sales Sequence

Draw on Sales Commission

A draw on commission is an advance payment a salesperson receives against future earnings, which is later repaid from earned commissions.

Draw on Sales Commission

80/20 Rule

The 80/20 rule, or Pareto Principle, posits that 80% of results come from just 20% of the effort. It's a key concept for prioritization.

80/20 Rule

Gated Content

Gated content is premium online material, like an ebook or webinar, that users can only access after providing their contact information.

Gated Content

Commission

A commission is a service charge paid to an agent for a transaction. It's typically a percentage of the sale, rewarding performance directly.

Commission

Docker

Docker is a tool that packages applications and their dependencies into isolated environments called containers for easy deployment and scaling.

Docker

Decision Maker

A decision-maker is an individual with the authority to make significant choices for a company, especially regarding purchases or strategy.

Decision Maker

Application Performance Management

Application Performance Management (APM) monitors and manages an application's performance, availability, and the experience of its end-users.

Application Performance Management

Lead Management

Lead management is the process of capturing, nurturing, and qualifying leads to guide them from initial interest to sales-ready.

Lead Management

HTTP Requests

An HTTP request is a message sent by a client, like a web browser, to a server to ask for a resource, such as a web page or an image.

HTTP Requests

Enrichment

Enrichment is the process of adding third-party data to your existing customer profiles to get a more complete picture of your leads.

Enrichment