The Pros and Cons of Private Label Manufacturing: What You Need to Know

private label manufacturing

Whether you’re launching a new business or you already own an established brand, chances are that you’ve heard the term ‘private label manufacturing’ being tossed around quite a bit lately. It’s an avenue that more and more businesses are taking, witnessing great success as a result.

However, private labeling isn’t for everyone. If you’re trying to decide whether or not this is something worth exploring for your business, read on as FLPL talks you through the pros and cons of private label manufacturing.

What is Private Label Manufacturing?

Private label manufacturing is when you work with a third-party company to create and manufacture your products

Some private label manufacturers solely offer manufacturing services, whereas others, like FLPL, provide a full package. In addition to helping you in the research and development stage, as well as ensuring that the products you’ve created are manufactured to the utmost standard, our services also include everything from marketing to brand development. Basically, we’ll be able to assist you with just about anything that your brand needs help with!

Private Label Manufacturing: The Pros

As you can imagine, private label manufacturing offers up a number of benefits. Let’s take a closer look at the most significant ones:

Expertise in All Areas

As we just mentioned, FLPL is a private label manufacturer that can help with various aspects of your business, in addition to manufacturing.

This makes it possible for anyone to turn a pipeline dream into reality. You don’t need to have years of experience in every aspect of launching a brand because we do, and we’ll share all of that expertise with you.

It’s a Cost-Effective Way to Launch a New Product Line

product line

When you do things traditionally, launching a new product line can be extremely expensive. It’s often enough to put many off when it comes to starting a new brand.

However, going down the private label manufacturing route is a way to seriously cut costs. How? Here are just a few of the areas in which you’ll be making savings:

  • You won’t need to hire experienced product developers and designers. Your private label manufacturer will provide this
  • When creating cosmetic products, you’ll have access to a huge catalog of scientifically-backed ingredients, many of which are considered to be rare in the industry
  • You’ll have access to product components and packaging materials that have already been tested in the real market, rather than having to organize and pay for this testing yourself
  • You won’t have to spend time and money sourcing factories
  • You won’t have to deal with shipping and other transportation costs. At FLPL, we’ll also take care of storing your products at our Los Angeles warehouse until you’re ready for them, saving you from having to rent a separate storage space

From cost-effectiveness alone, it’s easy to see why so many businesses are giving private label manufacturing a try.

Full Control Over Pricing and Profits

Not only is private label manufacturing a great way to save a few pennies, but, because you also have full control over pricing your products, profits also tend to soar. In fact, research shows that retailers who sell private label products rake in greater profits from them than they do from other brands.

There’s no getting away from the fact that consumers are increasingly attracted to private label goods, and this is reflected very clearly in profitability.

Full Ownership of the Manufactured Products

woman in factory

Many people are wary of private label manufacturing because of concerns that they may not retain full ownership of their products. However, the truth is, the products that you create alongside a private label manufacturer are still exclusively yours. 

This is partly why private label products are so sought after. They’re individual and unique, with many brands producing goods for niches that haven’t yet been catered to. This gives private label brands an edge over the competition, leading to a boost in sales.

Easily Adapt to a Changing Market

When you’re in charge of research, development, and manufacturing, it can take a while for your finished product to end up in your hands. Not only do each of these stages take a significant amount of time, but lead times from factories can also be extensive. 

This is why many larger brands that manufacture their own goods struggle to adapt to new trends and changing consumer demands. By the time they’ve responded to this with new products, trends and needs have moved on. This means that many brands find themselves constantly playing catch-up, rather than being the market leader that they hoped they would be.

This isn’t such an issue when you work alongside a private label manufacturer. Since all of the resources will already be in place, you can quickly whizz through the R&D stage. You can then pick and choose from an existing network of factories to ensure that your products are produced within the timeframe you have in mind.

Plenty of Growth Opportunities

boxes on conveyer belt

When working with a private label manufacturer, it’s so easy to grow your brand with new products. Each private label manufacturer will have a catalog of products that they’re able to create. You can then choose which type of product you want to produce before working with that manufacturer on the finer details.

This is a much faster process than if you were to go it on your own. It makes it so much simpler to add new products to your range. This can often give brands the push that they need to really accelerate growth and take their business to the next level.

At FLPL, we have a huge array of products that we can produce for you. From skincare to hair care to aromatherapy, the options seem almost endless. You’ll easily be able to find new products to propel your brand forward. This will ensure that you’re giving your customers everything that they are looking for.

Private Label Manufacturing: The Cons

So far, private label manufacturing may seem like a no-brainer. It comes with so many notable advantages, so why do things any other way?

Well, just like with anything in life, private label manufacturing has both pros and cons. In order to make an informed decision, you need to be familiar with both sides of the coin. So, let’s take a look at some of the downsides that you may experience if you choose to go down the private labeling route, along with how you could potentially overcome them:

Minimum Order Requirements

Whenever you produce anything at a factory, there will be minimum order requirements that you’ll have to adhere to. These make it worthwhile for the factory to actually produce your goods. Anything less than that and it simply wouldn’t be worth their time.

For many small brands, this can be problematic. Many factories require a minimum order of tens of thousands. This isn’t realistic for a startup or young brand.

However, when private label manufacturing, minimum order requirements are sometimes lower. At FLPL, our minimum order requirement is 5000 pieces, which is much more doable than what many other manufacturers demand

Sure, the more you produce, the lower your overall costs and the higher your profit. However, it’s never a good idea to dive into the deep end without testing the water first, and our manageable minimum order requirement will help you to do just that.

Your Success Hinges on Your Private Label Manufacturer

soap manufacturing

Hiring a private label manufacturer to take control of producing your goods will definitely lift a weight off your shoulders. However, it also means that you’re placing a huge amount of trust in someone else. If things go wrong on their end, the effects of this will soon hit your business.

This is why it’s so important to pick a reputable private label manufacturer to work with. Look for one that has already experienced success with brands that are similar to yours. For example, at FLPL, we’ve worked with so many different beauty brands over the years. This makes us a fantastic choice if you’re hoping to enter into the same industry. Whether you want to produce cutting-edge hair styling tools for the mass market or high-end grooming products for men, we have a great track record with all of that plus so much more.

It’s also important to ensure that your private label manufacturer is innovative. Sure, they’re able to produce the face cream that you want. However, do they also involve themselves in pushing industry boundaries? As an example, at FLPL, we’re always trying to help our clients find the next big thing. Not only do we produce ‘regular’ types of products, but we can also help to create one-of-a-kind game-changers for your brand. From instant, non-surgical wrinkle treatments to high-tech hair straightening brushes, we strive to ensure that our ideas and products are always innovative. After all, this is what you need in order for your brand to stand out.

Low Operation Control

Operation control refers to a person’s involvement in the manufacturing process. When private label manufacturing, your operation control is low. This is simply because there’s someone else managing the process for you. They’re the ones that have high control.

Having low operation control is part of the advantage of private label manufacturing. It takes so much work and pressure away from you, handing it over to people who have the experience to get the job done perfectly.

However, it can also mean that you’re often excluded from the quality control process. You’ll only see the final quality of your products once they’re delivered to your warehouse. At this point, it’s often too late to change anything.

The safest way to get around this is to find a private label manufacturer that’s happy to include you in their quality control measures. You should also seek out a manufacturer that has exceptionally high standards in regard to quality, just like we do at FLPL.

Would Private Labeling Be a Good Move for Your Brand?

When it comes down to it, the pros of private label manufacturing greatly outweigh the cons. Sure, there may be a few downsides to consider but, with the right private label manufacturer, these won’t be an issue. This is why, if you’re thinking about private label manufacturing, it’s so important to pick a manufacturer whose goals and ideas perfectly align with yours.

Click here to get in touch with FLPL today to find out more about the private label manufacturing services that we offer.

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