Private Label Body Care Products Are National Brand Killers

by Harry Patel Sales Manager

Total Expansion

These kinds of brands are preferred over large brands because they are a lot cheaper. The good reason for the increase in sales from these brands is quality. While the contract manufacturing body care products are cheaper but the products they sell are of similar quality which is sold by the larger brands.

This kind of brand does better sales in the in-house use products as compared to larger brands while in other categories the larger brands still dominate the market.

Initial Pricing

The pricing for this kind of brand is with the retailers and so they take care of choosing the accurate price for all their private label body care products. The only thing they look at while deciding the price of the product is their overall cost of the product. They also take care about how the price for this kind of product is currently ranged in the market.

Private Labeling Advantages

There are numerous advantages a retailer can get from piling up the shelves with body care products that have their names of it. Some of these are:-

• Control in Production

All the 3rd party companies begin their work depending upon the instructions given by the retailers which allow the retailers to have direct control over three important things- quality, ingredients, and pricing.

• Overpricing can be controlled by Retailers

Since they have pure control over the product, they can decide the cost and the privilege beneficial cost for the product.

• Brand Control

They can pick the correct sort of design and bundle for their products.

• Adaptability

At the point when there is interest in a new product in a market, these brands quickly begin production. While it required a longer time for the bigger organizations or companies which lead them already have benefit as well as credibility from the client.

• Customer Loyalty

If a customer likes your product, then there is a greater chance for them coming back to your store and won't think twice to try your products with your label on them. This may lead to a new wave of customers to the retail store.

• Building your brand

With these kinds of contract manufacturing body care products brands, one can build his own brand. If the guy chooses the right category to sell, he can have a breakthrough in the market in case the customers like their brand's product which can also lead to them expanding to other categories of product.

Private Labeling Disadvantages

There are numerous disadvantages or drawbacks a retailer faces by utilizing this private label body care products brand. They are:-

• Dependency on the manufacturer

While the retailer does have the control over the manufacturing process in this kind of branding, the finished product is still provided by the manufacturers and while the retailers can get the manufacturers to have a certain quality of the product it is the manufacturer's ability that will determine the overall quality of the product.

• Limited client access

The products which are sold under the banner of private-labeled brands are available in a limited number of stores whereas the larger brands have their products in almost all of the stores. This leads to larger brands having greater access to the customers as well as a greater number of customers as compared to private labeled brands. This can work as an advantage to these brands as well, as the customers return to the store often to get their products which increases the profit earned from those products.

• Co-op Funds

When the retailer is selling the products of an established brand, he may apply for co-op funds so that he can promote their product which is not a benefit a retailer can get in case of private labeling. One has to use his own money to promote their brand in case of private labeling.

Is Private Label killing the National Brands?

While yes, the private label brands do have an effect on the profit of the national brands due to the customers having an alternate for that kind of product, the national brands have customer loyalty way before the private labeled brands started to release their products in the market and do the number the customers shifting to those kinds of brands are comparatively less.

The market where private brands have significantly influenced the profitability of a national brand is body care products. This is because people buy the products and there is not much difference in the quality of the product which the two brands are selling. Thus, people turn towards private label beauty products.

The contract manufacturing body care products brands offer a great alternative to the customers for these types of products in the market. The only problem customers will have if they change location there is a very high chance that these brands don't have a store in that location. Therefore, they would have to go for these products from national brands.

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Created on Apr 18th 2019 08:22. Viewed 887 times.

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