Distributor Private Labeling: Is A Private Label Program The Right Investment For Your Business?

By Matthew Mapus, VP, Marketing; and Carrie White, Marketing Content Specialist, both of Zenex International

The number of available manufacture retail brand products on the market is substantial. There is no shortage of choices when it comes to cleaning chemicals, aerosol sprays, and industrial maintenance products in the market. Specialty automotive, industrial, and janitorial distributors have a bevy of options from large, medium, and small manufacturing companies to choose from.

The decision by distributors to private label brand products can be complex. Distributors often struggle with the decision to private label or carry house brands when it comes to off-the-shelf maintenance cleaning supplies like glass cleaners, odor neutralizers, hand soaps, carpet care products, disinfectants and more.

Distribution company business owners, managers, and buyers have many difficult decisions to make in the day-to-day running of their shop and may find carrying proven, recognizable brand products a quicker and easier way to grow their existing business or penetrate new markets. The decision to build a private label brand program from scratch may seem too difficult, time consuming, and costly to implement and manage.

In this article, we will highlight some of the challenges, considerations, and benefits of offering a private label brand in a distribution shop. We will address some common concerns and questions about switching or augmenting certain product offerings with a private label branding approach. Finally, we will share why subscribing to this strategy can build brand loyalty, protect existing business, and reduce business disruption.

Selecting The Right Private Label Supply Partner

One of the first and most important decisions is determining which supplier partner strategically fits with your business goals and objectives. Asking the right questions can play a significant role in the success or failure of a program in its early infancy, during intermediate growth stages, and as the business enters a maturity phase.

• Can the supply partner not only get you started, but support you through all the stages of business growth?
• Do they have a demonstrated history of working with distributor companies like yours and supporting their private label program?
• What strategies would they recommend for your business to be successful?

Understanding the strengths and weaknesses of a supply partner in areas such as the quality of products, services, and expertise they offer is an important initial step in the selection process. Taking ample time to diligently vet and qualify partnership options will prove worthwhile and improve the chance of success with your private label program.

Key Questions To Ask Suppliers Who Provide Private Label Branding Services

• Is there a large upfront investment or large minimum order quantity requirement to get started?

• Does the supply partner have material stocked and ready to ship to my location?

• Do they offer professional-grade products, or are they retail quality products?

• Do they have the graphic design expertise to create an engaging and effective label for driving brand recognition and equity within my customer base?

• Do they have an in-house regulatory department with in-depth knowledge of the complex and changing regulatory environment, so that we remain compliant with local, regional, and national regulatory requirements?

• Do they have robust product quality assurance processes and R&D capabilities?

The Right Mix Of Products For Your Business

Depending on the area of specialty, distributors should consider looking for a partner with a deep and wide roster of private label product options. The strength of a supplier’s product portfolio may vary depending on the end-user market, whether that is janitorial, automotive, industrial maintenance or specialty markets, for example. Although the level of investment in the number of products may be small in the beginning, this will change as the business grows, so identifying a supply partner with a large variety of products to choose from is an important consideration. Ultimately, the question you need to ask is, can the supplier grow with me as my private label program expands with existing customers and potentially new customer markets?

Keep Money In The Business, Not Sitting In Inventory – Low Minimum Order Quantity

Small business owners know better than anybody that managing cash flow position is always a challenge — whether operating as a sole proprietor, a partnership, or a family-run business. Finding a supply partner with a reasonable minimum order quantity requirement is advantageous as it allows distributors to effectively manage inventory levels, maximize cash flow, and build sales momentum. Finding a minimum order quantity requirement that works for your business can help reduce the upfront and on-going investment of a private label program.

Expertise Matters – High Quality, Professional-Grade Products And Premium Level Support

Does the supplier partner understand the market and what end-user customers are looking for? Do they provide professional industrial-grade products that can effectively meet the demands of your customers? It cannot be overstated how crucial it is that a prospective supply partner understands your business, industry, and the needs of your customers.

Professional-level support does not just mean consistent, reliable, high-quality products. It also means they have a strong knowledge of the industry and how to effectively use the products. It is critical that supply partners have outstanding inventory control practices, exceptional customer service standards, a deep understanding of regulatory compliance requirements, and a team for professional-level graphic design services.

Small and medium-sized distribution may lack the personnel or expertise to manage a complex regulatory issue, or perhaps the experience with a particular new category of products. Supply partners that can provide a strong support network are a great way to overcome this lack of knowledge and enter a private label arrangement that may not have been considered in the past.

Brand Loyalty And Recognition – Protect Your Business

Easily recognizable house brands can provide a level of comfort when it comes to brand awareness in the marketplace. At the same time, it can also pose some challenges. As the number of mergers and acquisitions, changes in supplier leadership structures, and complex business arrangements continue to increase, so does the number of supply disruptions. The result is inconsistent supply or out of stock situations that hurt your business and your ability to supply customers with materials. Distributors may also face stiff competition with many other distributors offering the same house brands to the same group of customers in their sales geography.

Building and establishing your own company brand with a compelling label design and packaging is one way to create company brand recognition, establish loyalty, offset competitive pressures, and drive repeat business. The most important results of this effort are that the distributor can improve control over product supply and market their own products to customers.

In conclusion, distribution companies have many options and challenges to consider when it comes to running a successful business. Following these guidelines and asking the right questions upfront can serve as a good resource when it is time to decide on private label product programs.

Since 2001, Zenex International has been an industry leading full-service provider of private label aerosol, hand soap, and liquid products, offering a broad portfolio of proprietary formulations through a trusted network of professional manufacturers and distributors. We specialize in providing a complete range of professional grade chemical products for industrial, commercial, and institutional applications and businesses across North America. Our advantage is simple – we provide private label branding services, industry leading low minimum order quantity requirements on every order, exceptional customer service, and quick turnaround times. We work intimately with distribution partners to enhance brand equity and enter new market sectors with minimal upfront investment. We help you win at the sink, win at the car, win on any surface. With thousands of product formulations to choose from, now is the time to review our products and get started. Visit www.zenexint.com/contact or give us a call.