Private label: a product made for your brand, to your specification
Private label means a manufacturer produces goods to your specification, and you sell them under your own brand. The attraction is margin and control; the price is commitment to stock.
What is private label and how does it work?
Private label is a model in which a manufacturer makes a product to your specification and it is sold only under your brand. You decide the features, materials or formula within what the factory can do, and you own the brand. The factory takes care of production, usually based on technology and sometimes base designs that it already has.
It works in a fairly fixed order. You define the product, find a producer, approve samples and packaging, place a first order and then sell the stock at your own risk. A first order is usually 300–1 000 units per product, though this varies by category, and the printed packaging or tooling often sets the true minimum.
Private label is the common middle ground between white label and a fully original OEM design, and that is why it is often right for a first own brand. It is not automatically exclusive, however. If the base product belongs to the factory, the contract has to say what the factory may sell to others.
Private label compared with reselling another brand
What really changes when you stop buying a supplier’s brand and start owning your own.
| Reselling a brand | Private label | |
|---|---|---|
| Margin potential | Set largely by the brand’s pricing | Higher, if the volume and costs hold |
| Stock risk | Sometimes shared or returnable | All yours, with no returns to the factory |
| Control of price and range | Limited | Yours |
| Responsibility for compliance | Largely with the brand or importer | Usually with you: see compliance |
| Demand on launch | Brand already known | You must create it and pay for it |
| If the partner changes terms | You may lose the product | You can change factory, if you own the specification |
| Upfront cash | Mostly the goods | Goods, packaging, design, tests, trademark |
Private label fits you if
- You already sell in the category, or know exactly who will buy from you
- You can name a difference buyers will notice
- You can pay for a first batch and still have a marketing budget
- You accept unsold stock as a real possibility
- You intend to stay with the category for more than one season
- Your margin works at a realistic price: test it here
Private label mistakes
Calling a label change a brand
If your only difference is the logo, buyers compare on price, and the cheapest wins.
Unclear exclusivity
The factory may legally sell the same item to your competitor if nothing forbids it. Agree the scope in writing.
Ordering for the best unit price
A bigger order lowers the unit cost, but unsold units are the most expensive units of all.
Frequently asked questions
What is the minimum order quantity for private label?
As a working guide, 300–1 000 units per product in a first order. Clothing, cosmetics and items with custom packaging differ considerably. Ask for the minimum on both product and packaging, as the higher of the two decides.
How much does it cost to start a private label brand?
The total includes goods, packaging, design, tests, trademark, freight and launch marketing. It depends mainly on category, regulation, order size and markets. Our cost page lists the drivers, and the calculator shows how much cash a first batch needs.
Is private label profitable?
It can be, but gross margin on paper is misleading. Check net price after tax and channel, then landed cost, then marketing per unit. If little remains, volume will not fix it. Profit is never automatic, and unsold stock can erase it.
Do I own a private label product?
You own your brand and whatever the contract assigns. The base technology or design may remain with the factory. If moving to a different producer matters to you, have specification, formula and tooling rights written into the contract.
Have a product idea? Check it before you buy stock.
Send a short brief. We tell you what we think, including when we think you should not do it.
Tell us about your brand
A few lines are enough: what you want to sell, where and to whom. We reply with an honest view of feasibility, the stages you need and the next step.
- No obligation: the first review of your idea is free
- If we think the idea will not pay back, we say so
- Your idea stays confidential; we can sign an NDA
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