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Is private labeling still profitable in 2024?
Private labeling is still considered a profitable business model in 2024 due to increasing consumer demand for unique, high-quality products and the ability to differentiate from competitors. The key factors to making a private label dropshipping business profitable include:
- Careful market and product research to identify profitable niches and high-demand products
- Sourcing reliable suppliers who can provide high-quality products at competitive prices
- Building a strong brand identity to differentiate from competitors and build customer loyalty
- Utilizing marketing and advertising strategies to reach target customers and drive sales
- Continuously monitoring and improving the customer experience to increase customer retention and repeat purchases.
- Successful private label dropshipping businesses also prioritize customer satisfaction, continuously improve their product offerings, and invest in their brand's reputation and customer loyalty. By paying attention to these key factors, a private label dropshipping business can build a profitable, sustainable brand in the competitive e-commerce market.
If you don’t differentiate your store, you’ll struggle to grow your eCommerce business.
A competitor can always source the same product as you and cut into your sales.
One of the best ways to stop this is to sell private label products. You can build a unique brand that keeps your customers coming back for more.
In this guide, we’ll take a deep dive into branded dropshipping. You’ll learn if this eCommerce model is right for you and how to get started.
Let’s dive in.
What is private label dropshipping?
Private label dropshipping is an eCommerce business model where you sell products under your own brand. It allows you to take advantage of the benefits of dropshipping while also establishing your own lines of products with your unique logo, design, and label.
You can sell your branded products directly to consumers while your supplier handles inventory and fulfillment.
Dropshipping vs. private label
In simple terms, dropshipping is when you sell a third-party company’s products in your store. The products are labeled with the manufacturer’s branding and tags.
Your supplier handles the storage and shipping of goods to your customers. Typically, you only have to pay your supplier when a customer buys an item from your store.
Private label is when you sell products under your brand. The product features your label, design, and branding. You may have some control over the product’s design, or you can simply re-label products before they are shipped to customers.
One of the main differences between dropshipping and private label is the order fulfillment method. You do not need to handle the storage and shipping of goods with dropshipping. The private label supply chain is generally much more hands-on.
However, branded dropshipping, also known as private label dropshipping, combines the two approaches.
You can create your own branded products while your dropshipping supplier handles the logistics of managing and shipping your products.
Pros & cons of private label products
Private label products offer some key advantages, including possible higher profit margins. But they also come with more risk and potential downsides.
Let’s take a look at the pros and cons.
Pros
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✅ Higher margins
People are willing to pay more for a product based on a brand name alone. Having a recognizable brand logo on the product is enough to increase its perceived value.
This means you can often increase your eCommerce store profit margins with private label dropshipping. When people like and trust your brand, they are willing to pay more for your products.
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✅ Differentiate your products
When you dropship generic products, it’s easy for competing online stores to see what you are selling and copy your product ideas. They will often be able to source the same product for a similar price.
With branded dropshipping, you are the only one that can sell your private label products. Your branded products are unique to your online business.
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✅ Create brand affinity
Private label dropshipping can help you build a brand that your customers remember. When you sell generic products, your customers may show more loyalty to the manufacturer than your eCommerce store.
With private label, your customer is more likely to remember you and buy from you again. If they’re happy with their purchase, they’re also more likely to check out the rest of your product range.
Cons
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❌ Harder to start
The standard dropshipping business model is easier for beginners.
With private label, you need to spend time designing your branding and product labels. It can also be harder to find branded dropshipping partners to handle fulfillment.
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❌ More expensive
It generally costs more to start a branded dropshipping store. Suppliers will typically charge more for sample products because of the additional manufacturing cost and time needed to produce custom logos and products.
You can make more per sale when you’re up and running, but it costs more to get started.
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❌ Higher minimum order amount
Many dropshipping suppliers often require a higher minimum order quantity to cover the cost of manufacturing unique branded products.
It’s easier for the supplier to produce generic products sold to multiple dropshippers. There is often no minimum order quantity for generic dropshipping products.
Private label vs. white label dropshipping
When you begin your search for branded products for your dropshipping business, you’ll need to decide between private and white label products.
The main difference between private label and white label is control over who can sell the product.
With private label, you have exclusive rights to sell the product. In some cases, you can also make changes to the product design.
With white label dropshipping, you do not have exclusive rights to sell the product. Instead, you are essentially buying a generic product and changing the label. Your product will be identical to other products apart from your branding.
How to dropship private label products (Step-by-Step)
Now we’ve covered the basics, let’s move on to the step-by-step guide.
In this section, you’ll learn how to start a branded dropshipping business from scratch.
1. Find a product idea
The first step is to develop a product idea that your potential customers will want to buy.
It’s essential to validate your idea before investing time and money in developing your branded product.
You can use keyword research tools to check the search volume for your product idea. Google Keyword Planner is a free option, or you can use a freemium tool like Ubersuggest.
These tools show you search volume estimates to help you see if there is sufficient demand.
The easiest way to find winning product ideas is SaleHoo Labs.
The tool takes recent sales data from eBay, Amazon, and AliExpress to show you top-selling products.
You can filter results based on sell rate percentage, price, and competition to narrow your search for dropshipping products:
Once you have a winning product idea, it’s time to look for a reliable branded dropshipping supplier.
2. Find a branded dropshipping supplier
A reliable supplier is crucial to the success of your dropshipping business.
When your products are sold under your brand, it’s even more important that your partner is reliable and provides quality products.
There are many places where you can find suppliers for your branded dropshipping store, including print-on-demand platforms, eCommerce marketplaces, and the SaleHoo Directory.
Later in the guide, we’ll reveal the 5 top places to find branded dropshipping products.
Here at SaleHoo, all of the 8,000+ suppliers in the directory have been approved for reliability and product quality.
To find a private label supplier, you simply have to search for your product idea.
Select “Manufacturers” from the “Supplier Type” filter in the left-hand menu to narrow your search.
You’ll then be able to see a list of potential suppliers.
The next step is to reach out to the suppliers and ask if they offer private or white label dropshipping services.
You can do this through the SaleHoo live chat feature or the phone number and email address provided on the supplier’s profile.
3. Create your dropshipping store
With a great product idea and supplier, the next step is to create your eCommerce store.
Your store will be the online face of your brand, so it’s vital to get this right.
The choice for most dropshippers comes down to Shopify or WooCommerce.
Shopify is easier for beginners, but you need to pay a monthly subscription fee.
You can choose a theme and quickly set up your store. Shopify also comes with a bunch of free and paid tools to help you run your store.
WooCommerce is free, but it has a much steeper learning curve.
Once your store is ready, add your branded dropshipping products and get ready to launch your online business.
4. Launch your private label store
The last step is to drive traffic to your online store and start making sales.
There are lots of different ways to promote your branded dropshipping products. And there’s no wrong or right way to do it.
Some dropshippers get great results from Facebook Ads and social media promotion.
But SEO and other free tactics can also be effective at getting eyeballs on your products.
How to brand your dropshipping store
One of the most significant advantages of private label dropshipping is that it allows you to establish a strong brand identity.
Your brand identity includes everything from your business name, the color palette of your store, to the tone of your copywriting.
You can think of your brand as the personality of your business. It helps you stand out from your competitors and be memorable.
An excellent way to start creating your brand is to step into the shoes of your ideal customer.
People like to buy from brands that reflect their personalities.
If your ideal customer was standing in front of you, what kind of personality would they have?
How would they look?
How would they talk?
The more you can make your brand feel familiar to your ideal customer, the more sales you’ll make.
Urban Decay is an excellent example of a company with a strong brand identity.
Across its store, products, and social channels, the cosmetics brand has a consistent and unique brand identity.
Best private label dropshipping suppliers
It can be tricky to find private label suppliers for dropshipping. But there are plenty of manufacturers out there.
You just need to know where to look.
In this section, we’ll list the top 5 places to find branded dropshipping suppliers.
SaleHoo
You can find private label suppliers right here in the SaleHoo Directory.
There are 8k+ listed suppliers, and many provide private label and white label dropshipping products.
Each supplier is investigated and assessed before being accepted to the directory. You don’t have to worry about low-quality products damaging your brand or shady suppliers scamming you.
Advanced search features also help you narrow in on the right products and suppliers that offer private label services.
You can quickly create a shortlist of suppliers with complete contact information and the option of live chat.
In short, SaleHoo is the easiest place for reliable private label dropshipping partners.
AliExpress
AliExpress is one of the biggest eCommerce marketplaces in the world. It’s also a great place to find branded dropshipping suppliers.
Most of the suppliers on AliExpress are based in China, but you can find some with warehouses in the U.S.
You can filter your product results by adding “private label” to your search. Once you’ve found a great product, you can contact suppliers through the platform.
Alibaba
Alibaba is the sister marketplace of AliExpress.
You’ll typically find more wholesalers, but there are plenty of dropshipping suppliers on the platform that offer private label and white label services.
If you want to secure a low cost per unit, you should consider buying private label products in bulk.
Then, you can find a dropshipping partner that is willing to handle inventory management and fulfillment for you.
This eCommerce model involves more risk and requires more upfront investment. But it can be an effective way to boost profits and scale when you find a winning product.
Printful
Printful is a print-on-demand (POD) company with fulfillment centers dotted around the globe.
You’ll find a good range of products that you can customize with your branding, including apparel, accessories, and homeware.
There’s also the option of creating customized branded packing slips to ship with your orders.
You can upload your mockups or use the Design Maker tool to create unique logos and designs for your products.
It’s worth noting that the cost per unit on Printful is typically higher than most private label dropshipping suppliers you’ll find on other platforms.
Apliiq
If you’re looking to dropship branded products and apparel with a strong visual style, Apliiq could be the right supplier.
The Los Angeles-based company is one of the most well-known POD apparel companies.
It offers high-quality clothing and accessories that can be customized and sold under your brand. You can add your designs, logo, tags, and customized packing slips.
Apliiq also has a Shopify app, so connecting your store, adding products, and automating the order process is easy. There’s also a delivery tracking app, so your customer knows exactly when to expect their order to arrive.
As with Printful, the cost per unit is generally higher than many dropshipping suppliers. Apliiq offers bulk buying discounts, but you’ll need to find a fulfillment partner or ship the products yourself to capitalize on the discount pricing.
Tips for branded dropshipping using private label products
Before we wrap up, here are some bonus private label dropshipping tips to help you get your store up and running and make your first sale.
Validate your niche
You can find private label products to sell in every niche you can think of.
So how do you choose the right niche for your branded dropshipping store?
First, you should create a shortlist of possible niches based on your interests.
You’ll find the process of building your store, sourcing products, and growing your business much more enjoyable if it’s in an industry you’re interested in.
Next, you want to verify that the niche is viable.
We’ve already covered how to conduct market research for specific products. But you can also get detailed insights on your niche idea using a free tool like Google Trends.
Enter an umbrella keyword or topic that covers your niche. You’ll then be able to see the interest in the niche over time.
Ideally, you want to see a steady increase in search volume over a sustained period. Steady and sustainable growth shows the niche will be viable for a long time to come.
Use Google to find suppliers
If you couldn’t find the right private label dropshipping product on the list of suppliers above, there are plenty of other options.
A simple tactic that works is to head over to Google.
Type in “private label” and the name of the product you want to sell.
To narrow in on dropshipping suppliers, add “no minimum” and the location of your target market to the search query.
For example, a quick search for “private label water bottle no minimum USA” returns the following results:
Within 30 seconds, you can find a list of possible private label dropshipping suppliers. All you need to do is visit their websites, get in touch, and order samples.
Order sample products
Before you start to dropship branded products, it’s highly recommended that you order a sample.
It’s vital that you test the product before selling it under your brand name.
Contact the supplier and schedule a phone call before ordering a sample product. This can help you judge the supplier’s legitimacy before handing over any money.
A product might look great online, but it’s only when you can test it for yourself that you’ll know if the supplier is right for you.
It only takes one bad customer experience to damage your brand. If you sell on eCommerce platforms and marketplaces, an unhappy customer can also result in bad feedback and even account suspension.
Write unique product listings
Adding products to your store is much more than copying and pasting the description from your supplier’s website.
You need to create compelling product descriptions that align with your brand identity.
Instead of listing the features, sell the benefits of your product.
Here’s an example of a product description from Urban Decay that leads with benefits and stays true to the strong brand identity:
Along with a strong product description, you’ll want to include high-quality product images from multiple angles.
A recent survey revealed that 75% of online shoppers rely on product images when deciding on a potential purchase.
Shoppers cannot see your product firsthand before they make a purchase, so high-quality product images are vital.
Steal your competitor’s marketing tactics
You need a marketing strategy to get people to visit your store. The right strategy will depend on your niche and where your target audience spends their time online.
If you need some inspiration, you can spy on your competitors to see how they generate traffic.
Similarweb is a paid tool, but it does provide a bunch of detailed insights for free.
Enter your competitor’s URL, and Similarweb will display a breakdown of information about sources of traffic, keywords, and more.
You can see what works for your competitors and use these insights to adapt your marketing strategy.
If your competitors use Facebook Ads, you can also spy on their ads using a paid tool like SpyFu or by searching the Facebook Ads Library.
Private Label Dropshipping FAQs
Starting a private label business is generally more expensive than a traditional dropshipping store. You’ll need a minimum of around $500 to order samples, create designs, build your store, and market your products. If you plan to hire a freelance graphic designer to help, the startup cost can increase.
The best way to price your private label products is to calculate the total costs you need to cover per sale. This should include the payment to your supplier, payment processing fees, website costs, and your marketing expenses. Once you know your total costs, you can factor in your profit margin to arrive at the ideal pricing for your private label product.
It’s important not to price yourself too high and lose out on sales. But you don’t want to be too low and rely on selling huge volumes to generate a decent return.
Making money with branded dropshipping in 2024
Selling private label products can be a lucrative online business model. You can generate higher profits while scaling your dropshipping store.
The three key elements are:
- A strong brand identity
- Reliable suppliers
- Cost-effective ways to generate traffic
It’s easier for beginners to get started with the traditional dropshipping model. You can transition to private label products once you’re more experienced.
If you need help finding private label and dropshipping products, make sure you check out the SaleHoo Directory. It’s the best place for beginners and pros to find profitable dropshipping products. As always, if you need help from our 24/7 SaleHoo support staff, just click here!
