Private Label Products in China: 2021 Complete Guide
February 23rd, 2021
Are you wondering how you can build a successful business based on private label products?
Private labeling can help you to start your own business and create your unique brand. With the transition from traditional retailor to online retailers, private labeling has become a huge success and can be a game-changer in selling products.
Private labeling helps sellers to better market their products and create a loyal following of customers.
It provides a competitive advantage to sellers in many ways including customer loyalty, branding, increased ROI, and exclusivity. With the right market knowledge and resources, you can private label your products.
In this blog, we will explain how to private label products in China, the required resources, and the complete process to kick-start your business. We will also discuss the benefits and challenges of private labeling.
Private labeling has become very popular in China in the last decade. Nowadays, Chinese retailers prefer private labeling instead of wholesaling as it provides more control and liberty to customize the product according to their liking.
Private label product can help sellers in their brand recognition in the Chinese marketplace and leads to the improved consumer experience. Private label product sellers can create their brand without a huge investment in product production and manufacturing.
1. What is private label products
Private label products are those that retailers or wholesalers get made from a third-party manufacturer. Retailor or wholesalers specifies product labeling, logo, packaging, material, and color and pays the manufacture to produce it.
Manufacturers produce these customized products using their material and then deliver them. Retailor or wholesalers private label these produced goods and then sell them with their brand name.
2. Branded vs non-branded products, which is better?
National brands are established and recognized brands that are trusted by the customers. For example, Walls, Yili, and Häagen-Dazs are some popular ice cream brands in China. National brands typically spend more money on marketing and product manufacturing which is why they cost more.
On the other hand, Private label products are generic brands that offer good quality products at low prices. Due to the current economic situation, consumers generally prefer Private label products as they are cheap and more affordable.
3. Rapid growth of private label products
The rapid growth of the Chinese economy has opened new doors of opportunities for Private label product sellers and manufacturers.
According to recent research, private label products are growing four times as compared to manufacturer brands. Many sellers that found reliable suppliers and manufacturers for their products are listed as best sellers on Alibaba by selling their private label products.
– Improved quality with the lower price
Consumers now prefer private label products as they are quality products with reasonable prices. A changing economy has affected consumers’ shopping behavior; consumers are more conscious about their purchase decisions and prefer quality goods at a lower price.
– Better markets reach
With the increased popularity and growth, the process of private labeling products has become very convenient and simple. As a seller, you simply need to find a suitable supplier to outsource their product instead of getting into a complicated manufacturing process.
4. Product diversification in private label products
Private labeling gives sellers the freedom to sell what’s trending in the market. The seller can select the supplier with the best quote and can quickly start their own business after spending a little time in product research.
The unique business model of private labeling allows the seller to select from a wide variety of products in different categories.
In traditional manufacturing, the seller can only manufacture a specific product, but with private labeling, there are endless product options to kick start the business as a seller.
Private labeling also provides sellers the liberty to choose several different products. For instance, as an online store, you can sell clothes, shoes, and sport accessories at the same time under your brand name without worrying about the manufacturing process.
5. Build your brand with private label products
With the help of private labeling products, sellers can build their brand without investing in tooling and complicated product development process.
The seller can simply put their logo on an existing product and start selling that product with their brand name. Brand name add a lot of value to your product as it gives your business identity and recognition among consumers.
Some of the Chinese manufacturers patent their products these days. While choosing a product for private labeling, it is better to avoid products that are patent and exclusive because selecting these kinds of products might result in copyright issues.
Chapter 2: How to select products for private labeling
Private labeling is the best way to start your own business without the complication of the production, equipment, and tooling. Everything starts with a great product idea. Selecting products for private labeling is a very crucial decision; hence it should be made very considerably.
Some product research tools can be used to make an informed decision by keeping the consumer demand in check. Following are some simple steps that can help you to finalize a product that can sell easily.
1. Extensive Market research
Extensive market research is the key to determine which product would sell easily and would be profitable for your private labeling business.
Select a niche market and then do proper research on the product, potential competitors in the market, and consumer demand. Also, it’s a good approach to narrow down your target customers because it will help you to select the right niche for you.
Online marketplaces can be a big help too while selecting the product for private labeling. You can check trending and hot selling products on Alibaba to see which products are in demand.
There are a lot of free tools available to perform product research. This process can be extensive and may take a few days but once you find the right product, it will all be worth it.
2. Making a list of Product ideas
After brainstorming, make a list of product ideas that you want to sell. After that, you can choose one product out of them that suits you best. Opt for a product with less than 1000 ranking and product reviews, otherwise, there will be very high competition.
3. Choosing the best product depending on specific product attributes
What kind of private label products are best for selling to maximize profit?
Product type, specification, size, dimensions, and quality have a huge impact on the selling of the product. You can consider the following factors while choosing the product for private labeling.
Ask yourself how your product will be better than your competitors? What additional attributes you can provide in the product that will provide you with a competitive advantage over your competitors? Focus on the attributes that your competitors are lacking because those attributes will help you to position your private label products.
– Product regulation and verification
It is better to avoid products that involve regulation and product safety concerns. Certain products require more legal paperwork as compare to other products. For example, if you choose to sell food, pet food, kids products, etc. Then you might have to go through strict regulation and approval.
– Size and weight
Prefer lightweight and small products that weigh less than two pounds. This will also save you the shipping cost and will require less storage area.
– Reliability and safety
Choose a reliable and trustworthy manufacturer so that there won’t be any compromise on the product quality and reliability. It will also ensure on-time product delivery. Your private label product is the identification of your brand, that’s why it’s important to take care of product quality.
Avoid products that you can sell in a specific season like winter clothes, customized gifts for specific events, etc.
Product packaging plays a very important role in making the right impression of the product in terms of aesthetics. Decent packaging will give your product a brand look and will make it stand out from other competitors.
Pay special attention to product packaging, you can also provide your manufacturer with a customized packing design according to your preference.
4. Branding and marketing
As you are building your brand with private labeling; you will need to come up with a marketing strategy to market your private label product. You can use social media to spread awareness about your products or you can also set up a website to market your private label product.
5. Product quality and pricing
Product quality is extremely crucial for private label product sellers. These products will have your logo and will be recognized by your brand name. If a product is poor in quality then your brand image will suffer.
Choose a reliable manufacturer that will deliver quality products to avoid such mishaps, securing great pricing from your supplier can result in maximum profit for you. Thoroughly check all the quotes and then make an informed decision based on the offerings.
Chapter 3: How to find reliable Product Manufacturers for private label products
Once you have finalized your product, the next step is to find a supplier that can manufacture the product for you. Online market places can be a great source to find trustworthy product manufacturers.
All you need to do is search your product, go through the similar products that you found, make some design changes according to your requirement, and then you can use those as a draft or sample design for your product. .
You can request quotes from the manufacturer and ask them if they can manufacture that product for you.
1. Popular E-commerce suppliers in china
Due to the convenience of online shopping, a lot of people now prefer online shopping in China. In 2019, Alibaba earned over $38 billion in a single-day sale. Following are some popular e-commerce suppliers in China that you can consider to manufacture your product.
Alibaba is a Chinese multinational e-commerce company that has where there are plenty of manufacturers and suppliers that offer millions of products. Alibaba offers a wide variety of products for private labeling and here everything you need to know about alibaba.
Private label product listing is different than off-shelf products. They are available on Alibaba as product listing and once the seller places the order to the supplier, then the product goes into production.
JD, also known as Jingdong is a very well-known Chinese online shopping Company. There are a lot of local and imported brands are available on JD. Sellers or retailers can contact the manufacturer to get their product manufactured.
Pinduoduo is an agriculture-focused technology platform in China. As a seller, you can use this platform to contact distributors and manufacturer for your private label products
Suning.com Co., Ltd is another famous retailer in china and it among the top three B2C firms in China. It can be a reliable platform to find products.
Taobao is a well-reputed Chinese company. It is a marketplace that provides the opportunity for small companies and entrepreneurs to open their online stores.
1688.com is an online Chinese e-commerce organization and online wholesale marketplace. It can be a perfect platform for sourcing private label products.
2. Choosing a Manufacturer for your private label products
There are a lot of ways in which you can get the right manufacturer for your product in China, ranging from local trade shows to internet forums and e-commerce platforms.
Attending local trade shows will provide you with information about the local Chinese manufacturing market. You can contact your trustworthy local suppliers for product manufacturing.
According to recent stats, there are more than 8.5 million active sellers available on Alibaba alone. Online forums are a good source to get supplier recommendations for your private label product manufacturing. Reddit, SaleHoo, and Warrior forum are some great online forums to start with.
Make sure to do a thorough background check on your manufacturer before making the final decision. You can check their business profile, past orders, and customer reviews to avoid any unwanted situation or scam.
Chapter 4: Benefits and drawbacks of private label product in China
Private label products can help you to establish a profitable business, brand name, and many other benefits. While there are a lot of benefits.
there are also some risks and challenges associated with Private label products that you should be aware of. This section discusses the benefits and drawbacks of using private label products.
1. Benefits of private label product in China
Following are some benefits of private labeling.
– Less Operating cost
You don’t need any tooling or manufacturing experience in private labeling. You simply need to place the order and your supplier will take care of overall product production including mold, tooling, and material, etc.
– Great profit margin
Private labeling gives you more profit margins as compared to branded ready-to-sell products. Private labeling reduces the operating cost and gives you the liberty to innovate the product to make it stand out from your competitors.
– Customer loyalty and brand name
One of the major benefits of private labeling is customer loyalty and recognition of your online selling business as a brand. Private label products have now gained consumer’s trust and are known for their good quality and exclusivity.
Over time your brand gains popularity and customers start recognizing your brand. By providing high-quality products, you can get a loyal customer base for your private labeling products.
– Customize products
Unlike branded ready-to-sell products, you can customize your private label products to some extent. You can communicate with your supplier to customize the material, product color, packaging, etc.
You can also come up with some innovative product ideas to separate your product from what your competitors are offering.
– Reduced Sample production time
After placing the order, the supplier can send the product sample in a minimum time. Some of the suppliers would probably already have product samples and a spec list which you can see and recommend changes in the existing product instead of creating a new one.
2. Drawbacks of private label product in China
Now, let’s move towards the drawbacks of private labeling.
– Dependency on manufacturer
Once you place the order, your manufacture will produce the product from start to end. Your brand name and reputation is depending on the quality of the product that your manufacturer will provide.
If product quality, logo, design, and material are not up to the mark then your brand name can suffer. Selecting a reliable manufacturer is a crucial part of private labeling because any negligence can harm your brand reputation beyond repair.
– Lack of control
You cannot completely control and customize your product design.
– High competition
You may face high competition in private labeling. If there are a lot of competitors selling the same product then you might have less control over your pricing and marketing strategies.
– Other Risks associated with private label products
Some other major risks in private labeling include high upfront costs, fixed minimum order quantity from suppliers which can be a problem for small independent businesses, and start-ups.
Chapter 5: Deciding product logo, packaging, and design
Spending time in designing your product logo, packaging and design will pay off in terms of the better brand image of your product, and the success of your private labeling business.
Chinese consumer pays extra attention to product packaging and color. By using attractive packaging you will grab customer attention more easily and can give your private label product more of a ‘brand’ look.
1. Does the appearance of your private label products affect consumer’s purchasing decisions?
Yes, the appearance and packaging of your private label product can have a huge impact on selling. The appearance and overall look and feel of your private label product can give your brand a unique identity and recognition among customers.
Carefully specify the logo design, exact print position, product dimensions, and artwork templates for your product depending on your target market.
2. Customization and exclusivity in private label products
Product packaging should be customized according to the shape and size of your product. You can adjust the packaging design according to product dimensions and size. Other specifications that you need to consider include material, inner and outer dimensions, color, surface lamination, and printing.
Chapter 6: Create and optimize private label Products’ listing to increase sales
Product listing is the title, description, images, and price of your private label product. Optimized and brief product listings determine the success of your product because they help in the better ranking of the product.
In this section, we have provided a brief guide to optimize your product listing on a famous e-commerce platform like Alibaba.
Listing your product on B2B platforms like Alibaba can help with ranking and gaining consumer attention. According to the current scale, products with effective and optimized titles rank 15% higher as compared to the other products.
You need to choose a Product name or title for your product using suitable keywords to rank better.
Keywords that you use in your title and product description play a very important role in the ranking of your product. There are many ways to choose the right keywords. For example.
You can use Alibaba’s Product Keywords Suggestion, hot keywords, and keyword optimization options to optimize your keywords. Also, keep updating yourself on your market niche because market trends change very quickly.
Optimize your product listing with changing market trends to stay up to date.
A better approach would be to use a concise, elaborative, specific, and relevant product title. Add a detailed product description. The description should not have too many technical details; instead, it should explain how the product can help the consumer in solving their problems.
Other information that you can mention on your product listing includes available shipping options, details regarding packaging, other services, FAQ, delivery and pricing stats, and additional information about your company/brand.
Chapter 7: Profitable private label products in China to sell in 2021
Choosing a trending private label product is the most crucial step of your private labeling business. Following are some of the trending private label product ideas that you can sell in 2021.
1. Private label cosmetics
Cosmetic and beauty products are always in-demand. They are not seasonal and they are in demand the whole year regardless. People are more self-conscious now and use cosmetics and skincare products on regular basis.
The consumer also wants to be aware of whether the product is free from harmful chemicals and cruelty-free makeup as more and more people are opting for natural products.
These points can be used to get an advantage over other competitors in the market. According to a recent survey, the skincare industry reached $180 billion by the end of last year.
2. Private label Clothing
Stylish and fashionable clothes are always trending. There is a lot of variety in clothing; you can choose formal dresses, yoga pants for women, maternity clothes, jeans. Clothes made from organic cotton can also be a great option because they are very popular among the consumer these days.
3. Private label Phone Accessories
Phone accessories are a great option for private labeling. According to recent research, phone accessories sales are estimated to reach $107.3 billion by end of 2022. Also, there is a huge profit margin for phone accessories.
This category can have a variety of product options including mobile phone cases, phone bags, chargeable phone cases, and adjustable cases.
4. Reusable bags
Consumers are concerned about the environment now and prefer environment-friendly products. Reusable bags can be a great alternative to plastic bags. Reusable bags can be a great option for private labeling.
5. Decorative items
Home decorative items can be a good option for private label products. They are not season-dependent like winter clothes and they can be profitable for the private labeling business.
6. LED lights
LED lights give a calm look to the room. Some of the trendings LED lights in china are Chinese lanterns, fairy lights, Christmas lights, and neon LED lights for room decorations.
7. Sports and yoga accessories
People are getting more conscious about their health now and they are more focused on a healthy lifestyle. Due to this increased demand sports and yoga accessories are high in demand. That’s why this category can be a good fit for your private label product.
8. Toys for kids
Kid’s toys are trending and can be a good option for your private label brand. Kid’s toys that are eco-friendly, simple and appealing, safe for kids to play with, wooden toys are a great option for private labeling in 2021.
Right kitchen equipment and tools can save a lot of time in the kitchen. There is a wide variety of products in this category.
However, these products may require high capital and a well-planned marketing strategy. Keep all these points in mind if you are choosing a product from this category.
Chapter 8: FAQs about private label products in China
1. Where can I buy private label products?
As a seller, you need to come up with a product idea and product draft for your private label product. Then you can use that information to request quotes from the manufacturer.
Thousands of suppliers are available in China that can help you with the manufacturing of your private label product. There are a lot of sources to find a reliable manufacturer to manufacture your own product including the internet, e-commerce platforms, local trade shows, and social forums.
2. What are the shipping options for private label products?
There are various shipping options available for shipping products from China. It mainly depends on your manufacturer and your preferences. You should enquire about the shipping method and cost before finalizing the deal with your manufacturer.
3. Are there any disadvantages of private label products?
There are some risks involve in private label products. Some of the major concerns are complete reliability on manufacturer or supplier, legality, and high competition.
4. How should we price private label listings?
Pricing is a very important element of the private label product listing. It should be too high as compare to your competitors because it can affect your sales. Also, it shouldn’t be so low that your profit margins get compromised.
5. Can we provide our packaging for private label products?
Yes, the seller can provide their packaging. Packaging of your private label products plays a very important role. It makes your product stand out from your competitors. Providing your unique packaging design will be a great way to improve the overall look of the product.
6. How much private labeling cost?
Cost depends on the kind of product that you are choosing for your private label product. However, its unit cost is much less as compared to buying ready-to-sell brands. The manufacturer produces the product in bulk, that’s why the overall cost to get your products manufactured is comparatively less.
7. Is private labeling a profitable business?
Yes, private labeling is profitable and trending business. Consumers are now inclined toward buying products because private label products are usually available at fairly less price than the branded goods without compromising on quality. A lot of people are getting into this business now.
Private labels can make your product stand out and provides competitive advantages over your competitors. It provides you with an incredible opportunity to start your own business and get loyal and satisfied customers.
The seller can start a business without any concern regarding product marketing, manufacturing, and other resources.
The process is quite simple: perform complete market research, select a product and choose a trustworthy manufacturer. After that, ask the manufacturer to send you some samples, discuss the cost and shipping charges and finalize the product design and logo.
With private label you can take your online business to a whole new level and can drastically enhance your profit and customer base.