Private label is a business model where products, in this case, clothing, is purchased and branded under your own company’s name. The manufacturer that provides the clothing may provide varying levels of customisation, however, there won’t be a need to design the goods from scratch. The manufacturer is using its own supplies to produce the products but then labelling it with the buyers’ own branding. It is an appealing business model because developing a brand gives you weight as a seller, and your business can scale as your brand becomes known and associated with the design of your garments. It allows you to stand apart from non-branded goods, a big plus in such a crowded marketplace.

What are The Benefits of Private Labelling?

•     Smaller MOQs:

Many private label clothing manufacturers typically allow you to order items in smaller quantities than wholesalers. This means you can spread your investment around. Instead of purchasing 200 of one garment for resale, you can purchase several units of 20, allowing for a more well-rounded product line.

•     Quality:

Purchasing private label increases your odds of connecting with a company that provides quality apparel in your niche.

•     Higher profit margins:

This business model has slightly higher profit margins and the ability for brands to separate themselves from the competition. As there are lower manufacturing costs, compared to producing your own products, this also creates higher profitability.

•     Flexibility in prices:

As you are purchasing these items at the manufacturer’s listed price, without paying a fee to a wholesale distributor, this can allow for greater flexibility in your retail price.

•     Control:

An attractive aspect of private label is the control you can have with regard to so many of the decisions made in your business.

•     Customisation:

The items can be personalised from colour to cut to fabric, and you can have your own brand’s label sewn directly onto each garment. This contrasts with ordering clothing from a wholesaler and marketing it yourself. For someone with an interest in a particular niche, this can make it easier to stand out in an already crowded marketplace.

•    Customer satisfaction:

You can make changes allowing youto have more control over customer satisfaction. If your customer feedback mentionsparticular issues with a particular line, you can address those before youplace your next order with the manufacturer.

•    Brand options:

It isn’t necessary to choosebetween only one or the other business model when starting your brand. Manylarge online clothing retailers choose to stock their stores with a combinationof staples sourced from wholesalers and more customised options purchased froma private label clothing manufacturer.

•    Range of apparel:

Private label manufacturersproduce a large range of apparel, from maternity clothing to athletic wear. Infact, many of the clothing lines that are sold on the likes of Amazon aresourced from private label companies.

What arethe Downsides of Private Labelling?

•    Legal issues:

When you brand an item,you take full responsibility for this. So, if what you are selling is ofmediocre quality or otherwise faulty it will be you in the firing line. If youwant to ensure liability sits with the manufacturer this needs to be documentedin a contract before you begin working together.

•    Upfront investment:

The one downside of starting aprivate label brand is you have to buy inventory up front, without knowing howmuch you’ll be able to sell.

•    Communication issues:

Working with overseasmanufacturers can pose communication problems. This can cause slower responsetimes and sometimes miscommunications on the actual garment being produced. Italso makes it harder to form a personal relationship with the people you areworking with.

•    Lower perceivedquality:

Some consumers also have a senseof pride towards products produced in their own country. You risk losing somecustomers by working with overseas manufacturers. It will be important todecide at the get-go how transparent you are going to be with your targetaudience.

•    Slower shipping timesand higher costs:

When working with overseasmanufacturers, shipping will inevitably take longer than with a domesticmanufacturer and will cost more.

Lookingfor Private Label Manufacturers

Having weighed up the benefits anddownsides of the way of doing business, you might decide that private labelmanufacturing is the right choice for you, in which case you can start byfinding a manufacturer with experience of your product. Whilst this might soundobvious, it is quite important. You are looking for high quality paired withreasonable prices. Shop around, get a few different quotations before you makeany decisions. Ask for product samples so you can try before you buy. Discussminimum order quantities, shipping times and costs, liabilities andresponsibilities. There are numerous sources for finding a private labelmanufacturer but google is a good place to begin.

This article has not been edited by SBS Zipperstaff and is re-published with permission from synzenbe.com

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