What to Look for When Outsourcing to Private Label Companies

Dropshipping has dramatically changed the way entrepreneurs enter the CBD business. 

The overhead costs of starting your own business can seem incredibly daunting. You need to consider storage fees, property costs, and inventory. For those without access to a substantial amount of startup capital, it’s often impossible to get a foot in the door. But, with dropshipping, anybody can start their very own CBD company. Being successful with dropshipping hinges on finding a successful manufacturing partner. Here are our best tips for finding a fantastic private label manufacturer. 

What Is Dropshipping? 

What Is Dropshipping?

Dropshipping is an alternative to the traditional retail model that’s been around for centuries designed to cut down on overhead and startup costs. Instead of maintaining a large inventory and a brick-and-mortar store, dropshippers act as a middle man between customers and manufacturers. This way, the manufacturer can focus all their attention on producing the best possible product, and you can focus all your attention on marketing cultivating a brand. And, because dropshipping businesses take place online via e-commerce platforms like Shopify, owners can save thousands of dollars on rent. 

More and more people are entering the dropshipping game, and it can be difficult for newcomers to stand out from the competition. The key is to partner with a great manufacturer. First, owners must make the critical choice of a white label or private label product. 

White Label Vs Private Label 

white label vs private label

When looking for a supplier, the first big decision to make is whether to go with a private label or white label product.

White label products are made for a multitude of resellers. Essentially, they’re a generic product that dropshippers can label with their own trade dress. Using a white label manufacturer is the fastest way to get to market since the products have already been designed and are typically already in production. However, because there will be several other businesses marketing the same exact product, it can be difficult to gain an edge over the competition—especially if there are already well-established brands successfully marketing it. 

On the other hand, private label manufacturers design items specifically for your business. Think about how the Kirkland brand only makes products for Costco, for example. Sourcing from a private label manufacturer may be the more arduous option for the business owner, but the results are often well worth the extra work. When using private label products, the drop shipper has significantly more say in the final product. Things like color, content, and size are often customizable, helping you come up with a product that will stand out from all the rest. 

What To Look For In A Private Label Company

What To Look For In A Private Label Company

If a dropshipper does decide to go with a private label, it’s important to find a partner that’s going to be the right fit. 

First of all, location is going to play a significant role. Manufacturers operating out of the USA and Canada can be more expensive than those in other countries. However, you need to consider where your customer base is located. If you’re marketing in North America but sourcing in China, there’s potential to run into shipping line issues. 

If you’re looking for a high-quality product, it’s essential that you find a private label company that doesn’t cut corners. Make sure to confirm that the potential private label company you’re interested in follows the current GMP manufacturing regulations. Also, it’s vital to ensure the product is Organization for Standardization (ISO) certified. This way, you can be sure you’re getting a premium product. 

Ultimately, when you outsource to a private label company, you’re getting a business partner. The day-to-day operations of your business will rely on clear and concise communication between you and the private label company. Therefore, it’s necessary to find a manufacturer that you can get along with and that you can rely on.