What Is Private Labeling And What Are Its Drawbacks?

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What exactly is private labeling?

When an item is bought by a retailer from a manufacturer and sold under his brand name, we call it private labeling. This provides the retailer with total control over the product, for example, a private label vegan food product. It will be possible for the company to market the item from another manufacturer under his label.

Private labeling comes with some advantages and drawbacks just like any other thing on the planet. Here, we have articulated some downsides of private labeling that you need to bear in mind.

1.       No support of minimum order quantity

Being a wholesale manufacturer, it is quite tough for the companies to take up minimum quantity orders for private label products. Although large and medium businesses might not suffer from this issue, the small companies and startups might find it quite challenging to satisfy a requirement of high minimum order.

2.       Problems with establishing brand loyalty

It is essential for small companies to take lots of measures for establishing brand loyalty amongst prospective clients. This might impact bulk private labeling since they need to survive in the competition that consists of giant companies as well.

3.       Lack of any real control when it comes to quality

You will be responsible for any defects in the quality of the product since you aren’t the actual manufacturer of the product. You happen to be the owner or the producer of the products in the eyes of the customers, and they will not hesitate to lodge complaints against you although you are not accountable for the loss of quality of the product.


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