How to Start Private Label Brand?

Private labeling has become a fundamental aspect of our daily lives, often without us even realizing it. Consider the last time you visited a grocery store; it's likely that nearly every item you encountered, from snacks to household goods, had a private-label counterpart. Many stores offer their brand, providing shoppers with a similar product at the same or a better quality.

As consumers increasingly prioritize value over brand loyalty, in-store brands are gaining popularity. In 2024, the Store Brand Private Manufacturers Association reported a notable 3.9% increase in private label sales compared to the previous year, significantly outpacing the 1% growth of national brands in 2016.

The private label market presents significant opportunities, yet many entrepreneurs are uncertain about how to enter this space. For many, e-commerce platforms like Amazon and other online channels are an effective way to find a wider range of customers.

Private labeling presents a fantastic opportunity to tap into various channels and create a legitimate business from the ground up, allowing you to gain control over your future.

Step 1: Choose Your Niche

Finding the right niche can be a significant hurdle for new entrepreneurs venturing into private labeling. Numerous approaches exist to identifying profitable niches and launching product lines.

Your niche choice will often be guided by the budget you have available to kick off your private-label product. For instance, if you're seeking a low-cost entry point, opting for a high-priced item may not be the best route unless you can find suppliers with low minimum options.

The range of private-label niches is huge. For instance, at Goodvar Laboratories, private-label skincare stands out as an excellent option due to the large market and the many opportunities available.

A robust strategy for selecting a niche involves comprehensive research, combining data analysis with your insights, and considering the available resources. If you already have a built-in audience or a strong social media presence, consider products that appeal to that group, which can set you up for success with a private label. Valuable data can be gathered from various platforms, with many sellers turning to Amazon metrics, especially if they intend to sell there.

The intuitive aspect plays a vital role when creating a practical checklist to evaluate your niche options and establish the benchmarks you need to reset before pursuing an opportunity. Your checklist criteria should include competition analysis, market research and product market potential. 

Step 2: Find a Private Label Manufacturer or Supplier

Partnering with a reputable private-label manufacturer is important for success in the private-label business. A good quality product and a great customer service are essential for customer retention.

Your options in this step will vary depending on your budget and the type of product you want to source. Many entrepreneurs think about importing products from overseas, but they can face challenges such as long lead times, high shipping costs, and, more importantly, quality control issues. As a result, many businesses prefer to work with private label manufacturers based in the USA, as this option can often be more straightforward and cost-effective.

It is important to evaluate your potential private label manufacturers, ensuring they offer wide based products for your future expansion, and lower minimums. And as a startup in private label skincare industry, you need to consider your manufacturers as a way of your success, they are your long term partners.

Step 3: Determine Your Sales Channels

The online sale channels have transformed the landscape for sellers, providing many potential customers eager to engage with your message.

Many startup sellers opt to start with Amazon and Shopify. Starting with Amazon and other big marketing channels will allow you to capitalize on their massive user base. Amazon alone enjoys billions of visitors each month, it can be an attractive choice for various niches, specifically the skincare and hair care niches

Using your own website to handle transactions directly is also a good start. This gives you a greater control over the branding and messaging compared to selling on Amazon.