After the outsourcing wave of the early 90s “Private labelling” (a.k.a White label) is becoming the ‘new Normal’ for brand positioning.
They are products or services are typically those manufactured or provided by one company for offer under another company’s brand. They are goods and services are available in a wide range of industries from food to cosmetics offering benefits to all the parties involved specially to consumers.
In fact in the book “Private Label Strategy: How to Meet the Store Brand Challenge” by Nirmalya Kumar… says it all, proving that private label sales are large and growing, and gives a tough competition to the major & established mega brand manufacturer’s clout and profits.
So there really are no good counter-strategies, except to reduce costs and perhaps spiff up packaging, advertising.
Well.. The above is no-where more true than for the cosmetic Industry – As with any industry This holds a win-win Practice for all involved so also specially for the highly competitive cosmetics market as it is often positioned as reasonably priced alternatives to regional, national or international cosmetic brands aided by eCommerce portals.
Thus the web online presence allows it to easily scale up & climb the value chain since in the recent years some private label cosmetic brand manufacturers have been positioned as “premium” brands developers to compete with existing “name” brands.
Web Rationalization for Cosmetics manufacturers using “Outsourcing”
A company ‘X’ using this strategic method can collaborate with the manufacturer to create a custom blend, which is pretty cost effective and also guarantees that the product is uniquely branded via online presence. Or a company can purchase whatever stock blends they carry, clearly a much cheaper option.
Private Label is done by many well-known brands manufacturers too so Manufacturers NEED to know what consumers truly feel about private label versus national brands, and how these white label brands are working to build their own brand fans.
These outsourcing cosmetics companies in this day and age of online marketing like to stay current with trends, regulations, quality packaging and ingredients, and all the factors that make a good beauty product continue to be vitally necessary to private label beauty product developers.
With the right “lab-to-market” mix, outsourcing companies can yield some spectacular results.
Thus “Private label” based cosmetics products segment is the driving force behind the decision of some companies to enter new market segments where some other brand of a similar company had made them famous (e.g., apparel companies launching perfumes)
As such white label may be extremely profitable for cosmetic companies having niche products ready to grab the larger market share for certain health & cosmetic products that enjoy high customer recognition due to a similar brand presence.
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