The Value of Private Labeling

As we look around distributors' shelves, catalogs, and websites, it's clear that private label products are playing an increasingly important role in the cleaning industry. With competition increasing every day, from new entrants in the marketplace to consolidation creating ever larger distributors, many companies have learned how to leverage their own brands to capture as much of the customer’s dollar as possible.

In today's landscape, when an end-user has so many options for buying a given product, the need has never been greater for the distributor to protect themselves and differentiate themselves from anyone that end-user may purchase from.

Where to Start & What to Private Label
There are a few key approaches to consider:

1. Consider your most popular product line. Which product is most-often in your customer's hands? That product is the one that provides you with the highest number of opportunities to make a positive impression.
2. Look to your products with high volume but low margin. Are there product lines in your portfolio that have become commoditized? If so, there is a strong chance that a customer would accept a substitute with your name brand on it, if you can articulate an advantage to your product over the existing.
3. Use private label to extend your current product line. For example, if you sell an aerosol degreaser that a customer cannot live without, it could make sense for you to introduce a private labeled companion liquid. Or, you may be having success selling a waterless hand cleaner, but you're missing out on revenue by not selling a wet wipe for the same purpose.

What to Expect from a Private Label Manufacturer

1. A manufacturer should have a clear understanding of your market and customer base. This understanding will allow them to make recommendations of products that you should private label, but also which products not to private label.
2. A manufacturer should be turn-key. This means they should have in-house R&D, in-house quality, in-house regulatory, in-house graphics, and numerous packaging options. In short, they should be able to deliver on all facets of your program.
3. Minimum production runs have come down in recent years. While some manufacturers choose to work only with very high-volume customers, others will put your name on a high-quality product for a minimal number of cases or units. Upfront costs tend to be minimal.

The barrier-to-entry is small, and the value is only growing, for distributors considering a private label program. For more information, contact Athea^® at 800-743-6417 or visit athea.com/capabilities.