Many distribution businesses including those in the janitorial and sanitary supply business are gravitating toward private label products to grow their business. In the cleaning industry, it is well known the highest margin item a dealer sells is floor maintenance and cleaning chemicals. This post takes a look at the driving forces behind private branding chemicals and what to consider when working with a chemical manufacturer.
Private label vs Private Brand
In general, private label products are distributor branded products that are often characterized as lower quality and sold at cheaper prices. In contrast Private Branded Products are equal or better in performance and quality to national brands and are often sold at modestly lower prices. These products include high quality color labels with a full suite of sales support materials.
Why should a distributor consider private branding?
The distribution landscape is being disrupted with the expansion of distribution channels with an ever growing list of distributors. The classic “jan-san” distributor category is being jolted by other B2B distribution companies including food service distributors, Industrial Distributors, Office Supply, MRO Distributors, and of course AMAZON.
The exclusive Manufacturer-Distributor partnerships of the past have fallen by the wayside, as manufacturers seek more distribution channels to get their products to the customer and grow their business. The result for distributors is increased competition and deterioration of profit margins.
These are some of the issues impacting distributors and why they might consider private branding as a way to gain more control over their product offering. When you have your own exclusive brand, profits will be sure to follow.
More margin, better loyalty, broader company recognition comes with branding products with your own company name.
Private Brand Manufacturer Checklist: 10 Questions to ask
- Are they experienced in private label manufacturing? Private brand manufacturing requires a different set of competencies than large scale manufacturing of national brands. Experience with shorter production runs and small order fulfillment are key things to look for in a chemical manufacturer.
- Do they have a broad formulation portfolio available? An expansive library of formulas available is important to match any product possibility.
- Do they have custom product design capabilities? A chemical manufacturer backed up by full lab capabilities is important if customization of a product is important. Chemists can develop end use specific products, offer duplicate products, match colors/fragrance and develop desired performance characteristics to create custom tailored products.
- What are the purchase minimums per product for private branding? Distributors just getting started should look for low minimums per product to minimize risk and keep inventories lean. Some manufacturers will offer minimums as low as 10 cases per product.
- Is label design, set-up and label printing included? Look for transparent pricing with no hidden charges and fees associated with label design, print set-up, etc.
- Are SDS’s provided, are they GHS Compliant and do they include a 24 hr emergency phone #? A reputable manufacturer is going to insure you have a fully compliant SDS for your product. Look for a manufacturer that provides a single SDS that includes information for concentrates and the diluted solution on the same document. Also, ask if they include an emergency 24 hour phone as required by OSHA.
- Is Literature included for each product? Ask the manufacturer if they provide literature set up services for each product at no extra charge. High quality literature and support materials are essential for private branding of products.
- Does the company provide product images for use on websites and e-commerce sites? Most distributors have websites and more are adding e-commerce ordering of products. Look for a manufacturer that provides web ready images of all private branded products.
- What is the prepaid freight policy? Inbound freight costs are a big issue for distributors. Look for a manufacturer that has a generous prepaid freight policy and one that allows you to combine private brand products with the manufacturers branded products to earn prepaid freight.
- Does the company provide rebates or sales incentives for purchases? Financial incentives are an important component for a distributor to grow sales of a private brand line. Look for a partner that offers rebates and/or sales spiff incentives to help support sales growth.
For a distributor to be successful with a private brand offering, they need to have product performance at a competitive price. Look for a manufacturer with easy to understand net pricing for all the products available for private branding.
Multi-Clean offers a turnkey private brand program called Build Your Own Brand. The program features high performance products professionally branded to your specifications.
To learn more, visit our private brand webpage at multi-clean