Money and the protection of your hard-won customer loyalty are two of the greatest benefits of selling private-label products. Most private-label manufacturers offer much extremely attractive gross profit margins on their products. Simply put, you keep a lot more money per sale than when retailing items where the markup is a mere 100% or less. Sure some will throw in shipping charges for larger orders and possibly even a discount or free product now and then. But when you compare this to the steady thick margins available in private-label selections the logic is clear.
As for the benefits of "free" brochures, printed bags, and samples I think a closer look will reveal an interesting insight. Where spa employees receive little sales training and are fearful of recommending products to clients directly things like "sales support tools" may actually help the customer to sell themselves on them. But relying on support tools as a primary means of product promotion actually encourages many professionals to avoid engaging in the direct approach, and this often results in a delay or loss of potential sales. Placing samples and brochures in the hands of customers is always a better strategy (and a less expensive one) when immediate post-treatment product recommendations by the esthetician is not enough to win the sale. Immediacy is everything in the world of retail. Where you have large gross profit margins you also have an opportunity to pay larger than usual retail sales commissions to employees—a real incentive in increasing individual employee sales performance. 20% commission is twice as attractive as 10%!
Competition in the spa, salon, and beauty products industry is at al all-time high. Day spa signs are sprouting up around us like spring grasses, grocery stores and gift shops have their own little "spa aromatherapy" departments, and .com companies have the huge beauty and wellness market firmly in their sights. It's becoming increasingly difficult for even large retailers to retain their share of the beauty products market when so many means of access to these goods is now available to their customers. Customer have beauty.com, eve.com, and the now famous Bliss catalog at their disposal and these companies make it very, very easy for your customers to browse and buy at home or work. If you haven't awakened to this business challenge yet it won't be far off.
Even more disturbing is a growing trend for suppliers of spa and salon products to begin offering their goods directly to the consumer—your customer. The reason for playing both sides of the fence is simple: it's far more economical for producers to sell directly to the public than through expensive distributors who must deal with lists of low-volume, slow-paying, support demanding small business owners. That's you and me folks. Once we have worked to establish a product line in the consumer market it is very tempting to bypass us and sell through e-tailers and home websites. Business is about making money and in a changing world companies must respond decisively and correctly in order to survive.
This is precisely where selling your own brand makes especially good sense. As far as the consumer is concerned the only place to get your brand is from you, whether it be at the retail counter, by mail order, or through your own online store. Department and grocery chains are dedicating increasingly larger amount of shelf space to house brands in an effort to reduce costs and limit competition. Many even feature "select" or upscale choices within their own lines as a means of eliminating holdover ideas in some customers that house brands are merely generic or of a lower quality than better-known products. The decline of cereal giants like Kellogg is an example of the success of this strategy for retailers.
So are private label products right for your business? Only you can answer this question accurately. But if retail profits, customer protection, and building some real brand-equity into your company investment has any meaning for you there are fewer options available that can help you better than this can. Best of luck to you!
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.