Dropshipping is a very lucrative business and allows entrepreneurs to sell goods to consumers without stocking any inventory. The business is classified as a low-risk model since you will incur minimal running costs. It is very easy to accumulate huge profits compared to other business models.
If you are an established or a new dropshipper, it is intrinsic to understand private label dropshipping.
What is Private Label Dropshipping?
Private label dropshipping is when you ship third-party products, and they are relabeled as your own. You can label the goods as your own by requesting the manufacturer to insert your company’s logo on the packaging or products. In this type of business model, you don’t have to store the products yourself. The private label gives you flexibility on the products you sell to customers, the shipping process, and the repackaging process of the goods.
Private Label VS. White Label Dropshipping
Private label in dropshipping is when a manufacturer or supplier supplies goods directly to your consumers, but those goods are branded like your own. In private labels, the manufacturer creates the products exclusively for your brand. In this model type, the manufacturer handles packing, storing, and shipping goods to consumers.
On the other hand, in white-label dropshipping, the product is produced by a manufacturer. The products your customers received are non-branded. If you need to add your label, you will have to rebrand it so that you can sell it under your name or branding. For instance, if you want to sell your products using the white label model of dropshipping, you will have to get your company on the products. Also, you will be involved in the process of repackaging and distributing the goods. Another way is to pay an additional price for labeling.
Advantages of private label dropshipping:
- Increase the visibility of your own brand
- Increase the trust of customers
1. Identify a Niche in the Market
The dropshipping business is very competitive, and if you want to stand out in the crowd, you must offer high-quality and unique goods. It is imperative to ensure that you assess the gaps in the market. Don’t build a brand on products that you have not validated.
If you are a beginner in private label dropshipping, it is integral first to study the target market and find various gaps that you can comfortably fill.
2. Identify a Private Label Dropshipping Supplier
Once you have identified your desired niche in the market, you can search for a reliable supplier. The process of finding a reliable supplier can be quite daunting. Thus you need to conduct adequate research.
Remember that your suppliers are essential stakeholders for your business. You should select one who can supply the products you require, has excellent communication, and supplies goods of quality standard.
It is imperative to test various suppliers by asking about their portfolio, previous client reviews, and sample goods. Since you are building a brand, a supplier who offers inferior quality products will damage your brand.
Another crucial factor to note is that you need to identify suppliers who accept private labeling. Some suppliers will accept private labeling but fail to offer dropshipping services in some instances. In such cases, the supplier may send you unbranded goods, and you are free to brand them. Also, there are some dropshipping vendors who would like to offer private label services(paid) such as Nihao Dropshipping, CJ Dropshipping, etc.
3. Ensure you have a Store
Once you have identified your niche and supplier, the next step is building a virtual store. If you are a beginner in dropshipping, the process of opening a virtual store can be involved. You need to ensure that it stands out in the market. You can check your competitor’s stores to know how to customize your store.
Additionally, ensure you have a distinct brand message and customized visual identity. You can promote your store by advertising on various social media accounts. Ensure that you design your pages more cohesively and create ads and content customized for your audience.
4. Customize and Brand your Products
As stated earlier, the products delivered to your customers are branded as your own. Thus it is imperative to ensure the manufacturers’ packages and brand your products properly. The packaging of your products should communicate the message of the brand.
The private label model of dropshipping is a great business model. What makes it outstanding is that you need zero inventory management, greater returns, and you can conveniently build your brand. In this model, it is intrinsic to ensure that you select a reliable supplier who can rebrand your goods and ship them directly to your customers.