Product development isn’t the only business model to excel. With constant progress in business models, opportunities are almost limitless.
There are now many business models which allow you to sell products without having to manufacture them yourself. One such business model is known as private labeling.
Unlike many other e-commerce businesses, private labeling is an edge advantage to the people who have already built an audience for themselves.
If you look at social media influencers, launching their own brands is just another passive way of generating income via private sales online.
What is private labeling?
When a manufacturer creates a product that is then exclusively sold by the retailer under a different brand name is termed private labeling.
With respect to CBD, private labeling functions when the products are brought from the manufacturer and sold under a unique brand name.
How does private labeling work?
The process begins with the retailer discovering the niche they want to operate within. The next step is to find a reliable CBD private label supplier.
It is important to know that when it comes to private labeling, entrepreneurs are looking for the products to sell under their own brand name, thus always searching for the goods.
Before choosing the private label supplier, the retailer mostly orders samples, to determine if they can associate certain quality or product with their brand name or reputation.
Private label vs. White label: What’s the difference?
Firstly, it’s important to understand how these terms differ. While there’s a clear difference between the two, many people use them interchangeably.
Let me tell you, White labels are the standard product formulations by any white label company for sale by multiple sellers.
To put it even more simply, a white label company produces the same product which is then sold under different brand names.
Thus, it becomes obvious why white label products are cheaper than the private label. Now, how is it different from the private label?
As mentioned above, private labels include specific and unique product formulations, which are sold under your brand name alone. Since the formulation is primarily as per your requirement, the products are more expensive than white label products.
I know what you might be thinking! Now, which type to choose for CBD products?
With the white label model, the retailer can get into the CBD business without having to invest a lot in its manufacturing, while going for the private label CBD products, saves one of the troubles of cultivation and extraction but not from the manufacturing.
Also Read: Private Label VS White Label
Pros of Private Labeling
Apart from having specific product formulation, the advantages of private labeling span beyond production. Have a look at the following:
By opting for the private label model, you can direct the CBD private label supplier about the material, ingredients, quality, packaging, and what the label should look like and pay them to get the product delivered.
Adaptability with product formation
Private label retailers also gain an edge by quickly adapting the product to meet the new emerging demands of the customers. While many white label companies cannot go for quick product adaptations and new features regarding CBD products.
Control over marketing and pricing
Since this model allows the development of unique products, thus it gives you control to the market and advertises the products however you like before making them available for sale.
Moreover, it gives the sole right to the retailer how they wish to price the products, which provides a healthy profit margin as well.
Challenges of Private Labeling
While the model, offers dozens of advantages, it isn't without challenges as well. A brief overview is as follows:
Difficult to build reliability
It is obvious that you would need a lot of time to build trust and an audience while starting a brand from scratch. It is one of the many reasons, why it was mentioned above that private labeling is ideal for people with an already established audience, that trusts them.
Dependency on manufacturer
Since a third-party manufacturer handles the product development for your brands, thus you are largely dependent on the manufacturer for the products. This is why choosing CBD private label supplier must be given detailed thought before proceeding.
How to look for the right CBD private label manufacturer?
Now that you have known substantial information about private labeling and how it can aid you with your CBD business let's get into knowing how to find the right CBD private label supplier!
- Firstly, begin with ensuring that the manufacturer uses the highest quality raw material, starting from hemp cultivation to the final product.
- Moreover, as a retailer, one must ensure that the CBD is cultivated and developed under controlled conditions to meet the unique requirement of your brand.
- Choosing a CBD private label supplier includes finding a manufacturer that used third-party lab testing to ensure an amazing finished product by the end.
- Lastly, after the raw materials become satisfactory, look for a manufacturer who can improvise the exact product required for your CBD brand.
How to know you have found the right manufacturer?
After going through a series of steps, I know what you might be thinking! To know that you have found the right manufacturer, the following boxes need to be tick marked! A guide to choosing CBD private label supplier is given below:
- The manufacturer but be trustworthy and reliable to risk your entire business onto him.
- The manufacturer must not shy away from innovation in CBD products, but rather stay ahead with new technology.
- The right manufacturer manages the quality from beginning to end and doesn't get in the way of your required product or quality.
- Make sure to confirm that the manufacturer is abiding by the CBD laws and regulations of the state he’s operating in. This is because you would never want your product to get banned for any negligence.
- Know that you have found the right manufacturer, when he works closely to understand your requirement, ultimately leading towards building trust and a reliable relationship.
- The right suppliers have a shorter turnaround time and are usually well committed to the deadlines they provide.
A step-by-step guide to begin with CBD private label business
The most awaited discussion is right here! After knowing all about private labels and choosing CBD private label suppliers, here is a step-by-step guide to begin with CBD private label business.
Decide the Niche
The first step, to begin with, is to figure out what to sell. Exploring several niche categories and the products in them will help you discover the field of your interest.
When it comes to CBD, lotions are among the top interest in private labeling. However, as per the adult survey, other potential products with audience’s percentage of interest in them are as follows:
- CBD balms- 29%
- CBD tablets and medicines- 18%
- CBD gummies -28%
- CBD oil and tinctures- 26%
- CBD-infused food such as chocolates and snacks-17%
Find the Right manufacturer
Once you have figured out the niche and product you wish to sell, the next step is to look for the manufacturers and suppliers who make those products.
Get the manufacturers' shortlist and contact them to see if they offer private labeling. This can help you quickly find out the manufacturer for yourself.
Moreover, be sure to ask the manufacturer the minimum amount of order, so you would know how to manage the finances and business plan accordingly.
As mentioned above, it is important to test the product before putting it for sale to your audience.
Even the product and packaging would look perfect online, but the reality can sometimes be very different.
The last thing you would want is a disappointment on a bulk order, thus ensuring the quality of products is important to maintain the standard and consumer expectations.
Set up your website
After tick marking the niche and supplier, it's time to finally set up your website for sale. You can choose among a number of e-commerce templates for your website.
Once you are done with setting up the website, the next aim must be to develop an easy navigation procedure for your audience.
Develop product catalog
Uploading the product catalog is another core step towards running your private label CBD business. While doing so, the following steps should abide by:
- Product descriptions play an important role in convincing the audience that your product is exactly what they need. Therefore, specs may be informational and must enlist features and benefits.
- Similarly, product images bring to the notice what the audience would be getting in exchange for their money. Thus, product images need to be close to real and well captured.
- A higher payout is a dream for us all, but make sure to keep the prices realistic, so that they don't be a turn-off for the audience.
Launch and advertise your brand
Now, launching simply does not mean turning on the switch and making the website accessible.
When you are ready to reveal the products and put them for sale, it's important to have an advertising strategy along, thus generating traffic on your site and facilitating the sales.
Top CBD private label suppliers in the USA
While there are many private suppliers to choose from, the top CBD private label supplier companies are as follows:
1. Joy Organics
Joy organics offers health supplements whilst dealing in both white and private label businesses. A list of their most raved-about products includes tinctures, sleep aids and beverages, etc.
This brand can be the best if you wish to sell organic CBD products. Their minimum order requirement is only 12 units which makes it even easier for startups to pair up with them.
2. Tropical labs
This is a brand dealing in CBD skincare products in the field of private labeling. Their most prominent products include pet skin care, lip balms, sunscreen, bath and body works, etc.
Tropical labs can get labels printed in different sizes and shapes and are open to partnering for manufacturing services as well.
They are the private label manufacturers in the niche of CBD personal and healthcare products. Neurogan allows you to customize the flavor, strength, and extract of CBD in the products.
The company sources its raw materials from California however, their minimum requirement is 100 units to get the products tailored as per your unique requirement.
How CBD-boxes may help you?
While CBD private label suppliers mostly deal with the product manufacturing alone CBD boxes can help you design unique packaging tailored as per the idea of your brand.
While being experienced in this niche, understanding the labeling laws and regulations make us the perfect packaging partners for your CBD business!
Starting your own private label business, exempts you from many hassles, with your unique branding and creativity skills, it's a great way to start your own business