Many retail stores are now into private label because of how it increased their bottom line. First, private label brands are part of the manufacturer’s branded production run. This makes the private label brands’ cost per unit cheaper than the manufacturer’s brand, whether it’s pet food or a fast-moving consumer product.
Simply low-cost
Aside from the most obvious reason why your retail business’ bottom line will increase is the fact that you won’t spend so much in packaging as compared to a branded product. Private labels usually have a simplistic layout for their labels. Printing for simple labels is definitely low-cost compared to the glossy labels of branded products.
Direct distribution
Another reason for that bottom line increase is that distribution costs are lower. Manufacturers deliver direct to your warehouse by the bulk. Sometimes, along with their branded goods you ordered. At the end of the day, distribution costs have been minimized.
Compare that to branded products that these manufacturers distribute to numerous outlets all over. Their distribution cost is definitely much bigger than that of a retailer’s.
Ad costs is virtually small to nothing
Manufacturers spend millions in advertising their branded products. Whereas you can just create your own poster about your own private label products, which costs little. You can even print fifty flyers, print it in black-and-white so as not to be costly, and distribute it within your store’s area. It still wouldn’t cost as much as the nationwide advertising of branded products.
Of course, you can advertise the old-fashioned way: by word-of-mouth. Now that’s advertising that costs nothing at all.
Turning savings to discounts
All that savings from promotion and distribution, most probably around 40%, plus the low-cost manufacturing of private labels means that you can now afford to offer your private label products at a discount, and still profit from it.
Majority of those who buy private labels are millennials and Gen Z, pet food purchases included. Their buying behavior have definitely helped the resurgence of private labels. Especially when it comes to online purchases, these millennials and Gen Z get 100% price transparency. So they opt for private labels that offer the same quality at a lesser cost.
Looking for the right one
Finding the right private label manufacturer can be demanding. But Addiction Foods is here to help you from start to finish. We may just prove to be the right one for your private label.
These are just guideposts for your consideration when embarking on sourcing for your own private label products. We encourage you to start your journey with Addiction Foods and see for yourself what we can do for you.
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