Sourcing 101 - How to find your Private Label Manufacturer


Regarding finding the perfect Private Label Manufacturer, one of the most common questions I receive from my DIY clients is, "Where do I search"?


It's a great Q and the answer is loaded, but I've included a few pointers below to get your wheels turning! For a step-by-step guide to sourcing a private label manufacturer you are welcome to check out the resources from my Online Course and/or book some time to chat!


Preparing for your Research

To prepare for thorough research yielding truly meaningful results, you need to gather your thoughts by answering the following questions first:


  1. How would you describe your product?

  2. Who else sells this product and at what price point? Build your Retail Landscape. Resource HERE

  3. What are the features/benefits of your product?

  4. Geographic Location:

  5. Do you have a preferred production location?

  6. What city, state, country, continent is best known for making your product?

Purpose

The purpose of the info above is to:

  • Guide your keyword searches

  • Inform your pricing model

  • Create a foundation for your one page product overview that will frame your manufacturer interviews


Warnings

I so wish it were all peaches & rainbows, but there are a few caveats to be aware of:

  • Unfortunately, many manufacturers might present themselves as being "Made in Italy" (for example) when in fact, they do not abide by the same working conditions, reporting, and rigorous regulatory environment that the longterm artisans do. I highly recommend visiting your manufacturer in-person early and often.

  • The largest manufacturing conglomerates pay for key word searches, so dig deep into the websites you find to ensure they are truly based in your target location.





I hope you took away a few golden nuggets above! Remember, sourcing a quality and trustworthy manufacturer takes a tremendous amount of time. If you get stuck or overwhelmed, I'm always happy to grab some time with you and get you over the temporary roadblock -- it often takes a seasoned veteran just a few minutes of abstract thinking!


Happy noodling!


mallory




Just a few quick TIPS & TRICKS


TIP: USA and Europe are known for high quality, high priced product. If your VP (value proposition) is quality driven, keep your search to known high-quality manufacturing locations.

TIP: Read product descriptions of similar products online for clues.

TIP: Do your research. Search Search Search for the history of your product. Learn where it was originally created + geographic hot spots known for its production. This requires major cyber sloothing! I just did this for glassware and it was fascinating.







Hey y'all! I began this product development journey 10 years ago, designing and manufacturing bedding for dorm rooms, and now here we are! Helping clients produce everything from soft accessories, textiles, and beauty to home goods and tableware -- all custom branded and/or private label. Although each product is different, the design and manufacturing processes have so many shared attributes.


Why private label? We want to help you build your brand, not someone else's. By bypassing purchasing product at wholesale, you allow yourself room to sell at both wholesale and direct to the consumer. Increased flexibility and dramatically improved margins. Yeah, buddy!

Let's dig into today's topic: Custom Tableware Collection Costs & Minimums


Topics Reviewed:

  1. Custom Tableware

  2. Everyday China

  3. Fine Bone China / Porcelain China

  4. Cost to produce and MOQ for custom Everyday China

  5. Cost to produce and MOQ for custom Bone China / Porcelain China


Porcelain & Ceramic Tableware


A few key questions that will help guide you in determining what, how, and where to manufacture:

  1. What is most important to you: Cost or quality?

  2. What is your target Retail Price Point?

If Cost, for a traditional everyday style dinner plate (like HERE) with a target retail price of ~$54 you can expect pricing to be in the range of $8 - $12, MOQs (minimum order quantities) to be in the range of 500+ per design (many times you can negotiate multiple designs), and production to take place in very large scale mass-production venues.


If Quality, for Formal Porcelain China / Bone China style dinner plate (like HERE) with a target retail price of ~$115 you can expect pricing to be in the range of $22 - $28, MOQs (minimum order quantities) to be in the range of 200 per design, and production to take place in very intimate environments with a small team of artisans applying art by hand, or hand-painting each piece.


I always love to conclude with a little business case, because at the end of the day, as a business owner the bottom line is your backbone for buy-in, credibility and longevity. With a business case, we are quickly answering the question, "does this program make sense?"


If your top priority is cost, here is your formula:



(MSRP * MOQ) - [(Production Cost * MOQ) + Shipping + Art/Design] = Gross Margin


($54 * 500) - [($12 * 500) + $1000 + $750] = $19,250


Production Cost: $12/pc

MOQ: 500/design (typically you can negotiate 2+ designs)

MSRP: $54/pc


Miscellaneous other costs

Shipping: I recommend budgeting ~$1000

Art/Design: I recommend budgeting ~$750 per design

Sampling: More often than not, you can negotiate to have your sample cost credited to your final invoice as long as you go to production, so I'm leaving this out of the equation. Feel free to ping me if you want to discuss further!



So, you turned a $7,750 investment, into $27,000 with just one order! With the exception of a few promotional expenses you'll probably have, that's $27,000 in revenue and $19,250 to your bottom line! This is ~$71% margin. Not bad!



If your top priority is quality, here is your formula:



(MSRP * MOQ) - [(Production Cost * MOQ) + Shipping + Art/Design] = Gross Margin


($115 * 200) - [($28 * 200) + $650 + $750] = $16,000


Production Cost: $28/pc

MOQ: 200/design

MSRP: $115/pc


Miscellaneous other costs

Shipping: I recommend budgeting ~$650

Art/Design: I recommend budgeting ~$750 per design

Sampling: More often than not, you can negotiate to have your sample cost credited to your final invoice as long as you go to production, so I'm leaving this out of the equation. Feel free to ping me if you want to discuss further!



So, you turned a $7,000 investment, into $23,000 with just one design! With the exception of a few promotional expenses you'll probably have, that's $23,000 in revenue and $16,000 to your bottom line! This is ~$70% margin. Not bad!



*Please note, these production costs are on the high side to allow for very conservative projections. Once you get into the process, I think you'll be pleasantly surprised by lower production costs.



What did you love? What did I miss? Hit me up with questions, this lights my fire!!!


Mallory

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Did you know Private Label product has surged since 2015? In fact, according to a recent Gartner review industry Behemoth Amazon has made a huge bet... "To meet growing demand, Amazon has aggressively expanded its private label assortment across major categories, posing a threat to legacy brands and retailers as the e-commerce giant attempts to capture a greater share of consumer spending."


14% of total accessories unit sales are Private Label.


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