Private label is an industry model in which private buyers acquire ready-to-use, generic supplement products from foreign manufacturers. Usually, the manufacturer is utilizing its own raw material in making the product but then customizing it with his or private label supplements manufacturers her own labeling. However, there are some private label supplements manufacturers that outsource all of their manufacturing responsibilities to domestic manufactures. In the U.S., there are many companies in this specialized field; here are some of the more popular ones. These brands are known for providing safe and effective supplements.
This type of manufacturer allows the consumer to be a partner in creating their own supplement. It is beneficial for the manufacturer because they don’t have to pay the expense of establishing a brand name and paying for product development and launching. All business costs are up to the purchaser. Although there are several benefits to this business model, there are also a few drawbacks which we will discuss below.
The main drawback for many companies selling private labeling products is the lack of branding opportunity. Brands are crucial for the success of a supplement because they provide consistent quality at a low cost. If the manufacturer does not have a strong brand reputation, there is a good chance that consumers will not recognize the company’s website or ingredient list. In addition, this type of marketing sometimes limits the options of consumers who prefer organic and natural ingredients over chemically enhanced and processed ones. Some products are only available from specific online vendors; others cannot be purchased from just about any seller. Many companies must use a third party to distribute their private label brands online and the vendors do not have the same kind of branding opportunities enjoyed by most U.S. companies.
Another major disadvantage for some manufacturers is the difficulty of obtaining their own supplier database because of legal requirements. According to law, these companies must compile a substantial supplier database with names, addresses, and other identifying information of verified and potential customers. Although most companies view this as a tedious, time-consuming, and expensive endeavor, they must also adhere to the mandates of the Food and Drug Administration (FDA) which requires them to conduct extensive tests on their private label products before distributing them to retailers and healthcare providers.
In some countries, the government can serve as a source of data for locating potential private label suppliers or wholesalers. The Chinese Government has been an active partner in helping foreign manufacturers get a foothold in the country by granting licenses for several Chinese office supplies manufacturers. Alibaba Group, a majority-owned subsidiary of the Chinese stock market, has developed its own private label product line through the acquisition of several companies including Xigong Yangdi Yeh, a leading provider of nutritional supplements in China. Xigong Yangdi produces health and body care products including energy drinks, weight loss products, and anti-aging products.
For companies wishing to enter into the private label industry, they must register their brand with the FDA. The company must then secure an official supplier database. This database acts as a referral and approval mechanism for wholesalers, manufacturers, and retailers. The FDA has a website that can be used to find a potential supplier. Before any distributor can begin selling its private label products, the company must also get its own private label brand. This process requires diligence and careful decision-making by the company and its associates.