You probably have come across this term “private label foods” at some point while surfing the net. Well, if you have and it struck you the first time or this is your first time, we’ve got you. Then, this post will shed some light on the idea of private label food manufacturers products wholesale and before you finish reading, you should have loads of information about the subject.
Here’s a hint. Firstly, you’ll get to know who private label food manufacturers are and the reasons why you should choose them. Secondly, you’ll also understand how to work with these manufacturers. Our guess is you are already itching to begin, so let’s get down to business.
Who Are Private Label Food Manufacturers?
These private food label manufacturers are simply private label (know more) suppliers that focus on the supply of foods and beverages. Moreover, some of the products they manufacture include protein bars, vinegar, pasta, cereals, and chocolate. Others are coffee, oils, kitchen suppliers, dry goods, confectionery, etc.
Also, private label food manufacturers make use of their own processes to manufacture their food and beverages from scratch. Consequently, after they do this, they sell them to merchants at wholesale prices. In some cases, they carry out three functions which are manufacture, wholesale, and supply their products.
Again, one fact stands them out from other manufacturers. Rather than having their own name on the packaging of their products, they allow other merchants’ labels on their products. Absurd, right? Well, that’s what their business model entails.
Also, there’s more. In addition to the above, they would even bend their production techniques and make little changes just so that they can satisfy specifications stated by their merchants. Also, it is safe to say that private label food products wholesale allow the same product packaged differently for different merchants.
Private label foods may look totally different to the consumer because they do not have background information on the manufacturer. Though this is a general concept, it may not always be the case as some manufacturers produce bespoke items for a few merchants. As a result, this way each product is a bit different from the others and from the original.
Why Go for Private Label Food Manufacturers Model?
By now you must have figured out that the private label food manufacturers’ model stands out from the different other business models. Some of the famous business models are dropshipping, manufacturing, and wholesaling.
Let’s check out what differentiates private label food manufacturers from other business models and why you should go for them.
Most of the other business models do not give you the opportunity to brand the product. However, with this model, when the manufacturer provides you the items, you have control over branding. This way, you decide what you want to label the products and achieve it just how you imagined.
Direct product control
With this business model, you don’t just decide how the product is branded. You also have the opportunity to decide what it is made of based on your personal preferences. The advantage of this is you can get input from your customers and affect it on your products.
The private label food manufacturers’ model allows you to provide lots of input in the production process. The advantage this provides you is that you now have the ability to decide the prices and profitability of the products. The profit margins are much more flexible and generous than wholesaling and drop shipping.
Other business models make it a bit more difficult to establish your business in the marketplace because all the merchants have easy access to the suppliers. This makes the profit margin very slim and stiff. With private food labels, it is very different since you can have unique packaging making you the only provider of that product on the market.
Ability to start
There is no need to have manufacturing skills to begin this sort of business making it more accessible than actually being a manufacturer. Here, you can decide what products you want to sell after the manufacturer has produced them then add them to your store. It is quite similar to drop shipping in this aspect.
Loyal customer base
You can easily build a customer base and knock off competition since your products are mostly designed uniquely for your store. This unlike wholesaling and drop shipping where merchants all have access to the same source thus raising the level of competition. In private label food products wholesale, your customers are loyal since you have yourself to contend with.
Disadvantages of Private Label Food Manufacturers model
It is almost impossible for anything to have advantages and be void of any disadvantage, no matter how few. The private label food manufacturers’ model is not void of its own share of disadvantages. In this section, we will discuss a few disadvantages that are most conspicuous with this business model.
There is a possibility of limited branding options
Despite the fact that you have the opportunity to decide the branding of the products supplied to a large extent, there are a few constraints. Furthermore, the manufacturer may have limits on the number and types of labels used, the packaging containers, etc. Therefore, it is usually with respect to what is available to the manufacturer or what they will let you use.
This does not occur often with private label food products wholesale but there is a possibility. Moreover, it may occur when you choose a manufacturer that is not into private label food. Usually, the profit margins are always higher than what is obtained in other business models but the possibility of low-profit margins cannot be ruled out totally.
Limited product choices
Another thing of note when you choose a private label food manufacturer, you do not have an option regarding the creation of a new product from scratch. Therefore, you only have leeway to suggest alterations to the original product based on your preferences. With this, you do not have the luxury of creating a new unique product, you are only limited to what the manufacturer provides.
MOQ stands for Minimum Order Quantities and it means the manufacturer specifies a minimum amount of products you can order. Unlike in dropshipping, this number is quite large and you have to pay for them and resell to your customers. So, if you do not have the capacity to handle a huge load of products, this might be a major challenge for your business.
Basically, with the private label food manufacturers’ model, the products are similar to little alterations and differences in packaging. Therefore, when a certain product is sold by several other sellers, then it may be difficult to be unique in that niche.
How to Work With a Private Label Food Manufacturer
At this point, it is very clear that the private food manufacturer is a major player in actualizing your new business. Therefore, it is very important for you to know how you can pick out an efficient supplier and make contact as well.
Also, it is obvious right now that this business model is not so popular as its counterparts, regular manufacture, and wholesale. As such, it is possible to see one supplier running totally different from others despite the fact that they offer the same class of products.
Then, to get the best-suited supplier for your business, you may have to reach out to a couple and then weigh your options. Therefore, your best bet is to discover what products you want to focus on and how you want to run the business. With these, you have your criteria in place and it becomes easy to choose a manufacturer that suits your purposes.
Since you have decided to focus on private label foods, you have already narrowed down your search considerably. Still, it is important you figure out how to find the best-suited manufacturer for your business. Before going ahead, this business is mostly run online so you have to search for the manufacturers online too.
These are the best-recommended methods:
- Google search. First of all, this method is highly recommended for a person who has a lot of time to carry out a search or seeks a specific kind of supplier. It might be time-consuming but you are likely to fish out the exact supplier you need to grow your business.
- Online directories. Secondly, if you feel you don’t have the luxury of time to carry out a search, then this method should sit well with you. It is seen as a more efficient method than running a Google search.
- Using Alibaba. This method is great when you seek a supplier outside the shores of your country, especially one located in India and China.
Tips on contacting your selected private label food manufacturer
These are the recommended steps to reach out to the manufacturer you have chosen.
- Firstly, be clear about what you want and give a call-to-action so they can respond.
- Secondly, make use of numbers.
- In addition, patience is key.
- Next, use lists.
- Then, give examples where required.
- Also, don’t ask too many questions. Just keep it short, sweet, and simple.
- Finally, don’t jump to conclusions. You may need to ask questions back and forth for a while until you fully understand the process and terms.
At this point, you must have understood private label foods, how to work with private label food manufacturers and the advantages of private label food products wholesale. If you have any questions, drop them in the comments section, we’d love to read from you. And also you can click zigpac to get direct help!