7 Reasons to Private Label

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By Douglas Preston

As a spa owner and private-label retailer with 20 years of business success I offer you my 7 best reasons to create and sell your own product brand NOW! This is a strategy any spa business, large or small, can achieve with minimal expense and risk.

1. Money, money, money. Spa and salon owners never have enough of this. The cost of operating our business is much higher than we ever dreamed it would be! The majority of us are working owners—people who struggle to run a company while maintaining a crushing schedule of personal clients to help pay the monthly bills. In order to make money we need profit, and the typical 100% markup available on most recognized product brands doesn't leave enough to cover the overhead let alone give us some extra income. Selling your own product brand, so long as it doesn't appear too generic or isn't too easily recognized in the competing market, is a great way to set your markup at a level consistent with real profit, at least 175% markup or more. Because your brand appears to be exclusive, price comparison becomes difficult if not impossible. Goodbye MSRP!

2. Client retention. Anyone have a problem with this? Between spa visits your customers are bombarded with slick newspaper and magazine ads, infomercials, seductive store displays, special promotions, and direct mail pieces. They go to product parties hosted by friends and family, and they hear the praises of some other hot spa, aesthetician, or hairdresser—that is, other than yours! Clients also forget to reschedule spa appointments, have need to cancel, or sometimes move out of your area. Products sold under your company brand and, available only through you, maintain the consumer connection with your business even when appointments aren't feasible for them. My spa has developed a remarkable mail order trade for our company branded products with customers who find it inconvenient or impossible to shop us in person. We work hard for those relationships and always need their business, so why make them easy to lose?

3. Brand equity. You may not be thinking of it right now but one day you may consider selling your spa or salon. When that day comes you're going to total up its value and pitch it to an interested party. Most important to a prospective buyer will be the assets of the company, chiefly, the things you own that can be safely transferred and to them. These assets, hopefully, will produce a reliable, profitable income. When you build up a strong retail trade in a product brand that you own then the brand itself becomes part of your company's sellable equity, something more than your fragile service goodwill.

4. Market protection. Competition will come. Employees will leave and open up a shop in your market area primed by some of your own former clients! Name brand distributors, rightly so, will endeavor to create as many accounts as possible wherever they can, and will often chafe at a request for exclusivity (hey, they have to make a living too...) Some well-entrenched brands seem to be everywhere, thus diluting the uniqueness of your product offerings. You can be the source of something your client loves to use. Even if competitors sell a similar private-label brand it still has a different identity wherever it's sold. We carried a well-known private label brand of cosmetics in my spa for 16 years and, although the same manufacturer supplied numerous other salons in our area, never experienced a customer comparing a similar product to ours. Since most customers don't use more than one spa or salon anyway, they're not likely to see these same products repeatedly.

5. Selling feelings (souvenir sales). This is big business whether you're Disney or Niagara Falls. People love reminders of places, events, and experiences that make them feel good. While the souvenir is not an exact replica of the thing it represents, the buying customer will infuse the item with emotions that can be recalled by seeing, wearing, or using a product clearly associated with it. Brand identity also has the power to create a customer sense of identity with a place or event that others may admire. We're talking about fortified self-esteem here, and if your product can build than in your customer, all the better for everyone. Is your spa or salon a positive, memorable experience for your customers? Do they adore you and your business? Do they love to refer others to you? Help them out then by providing products that bear your company identity—let them take those good feeling home and use some of it there!

6. Prestige. The more established a business looks the better a business it will appear to current and prospective customers. It's impressive to have both your service and consumer products linked under a single identity. Seen any other coffee brands sold at your local Starbucks lately? Not likely! They look after their own brand and are confident in it. And while they didn't invent coffee they do prepare and sell it in their own unique way—not many would question their success in that old and saturated market. If you believe in your services then you can extend that confidence to a product brand that reflects a similar quality—there's a lot of money to be found there.

7. Thinking BIG! Most of the major producers of skin and hair care products today began as small companies. They grew along with their reputations and, for some, their advertising budgets. Could your brand rise up among the old guard too? Yes! Remember, not everyone will have the foresight, desire, or courage to self-brand a product line. In fact, the majority of spas and salons still prefer to sell products with well established reputations regardless of the fact that most clients will buy on the strength of the professional's recommendation whether or not they're familiar with the products being promoted to them. I can't name the line that we haven't won a client from with out brand. NYC's famed Bliss Spa now distributes its branded line as a national offering—just check out any Sephora if you're in doubt. Not bad for a local girl! In the business of spa, product is where the money is, and it provides the only alternative to those hard earned and notoriously thin service profits.

About Preston, Inc.

Preston Private Label offers over 100 outstanding, results-oriented skin and body care products for both retail and professional use. We offer an excellent—-and free—-regional technical and career-building education program, affordable minimums, and fully custom labels, pre-applied. Choose from two packaging options and get the look that best suits your branding strategy. Generous margins that allow for markup from 150-700%  mean you gain maximum benefit from retailing.  From cleansers and toners to cosmeceutical serums, pro enzyme, glycolic and lactic peels to body contouring wraps, gift kits to aromatherapy oil blends and more, we have everything you need to create a highy effective, full range product line. Visit our website at www.prestoninc.net for more information!