Abstract / Resumen
Are you planning to import products but you don’t know if it is better to do it with your own brand or with a private label? We will try to explain the advantages and disadvantages of both options, from our experience.
As sourcing experts, we receive hundreds of requests from companies each year that decide to import their products, mainly from China, in order to reduce costs. Bear in mind that giving up an own brand does not always equate to higher profits. Quantity is the most relevant factor when obtaining a budget.
Furthermore, it is vital to understand that creating a new brand takes time and, of course, a marketing strategy to help yourself become “known”. In other words, creating a brand is a slow process that pays off in the medium and long term, and in business it is important to know how to be patient.
5 factors that will determine whether you need to import under your own brand or not
For both medium-sized and large companies, marketing their imported products under their own brand is a no-brainer. However, for smaller companies, or even medium-sized companies that are looking for new lines of business, it is not always clear whether it is profitable initially to build their own brand. They need to consider a number of factors that will help them make the right decision.
For many companies, it is the quantity of products they are willing to buy that clearly defines whether to take the step of creating their own brand to import from China or to simply purchase generic products with no associated brand.
If the investment to be made is very small, it is likely that buying a generalist /unbranded product that is part of a large production chain is better than having an own brand in order to get a competitive price.
Experience has shown that the sales channel often completely determines whether a company is willing to create their own brand or not.
Many sellers import private label products from China and then sell them on marketplaces such as Amazon or similar. The characteristics of these platforms mean that the own brand is relegated to second place.
The purchasing power of the company will determine the entire import process. When the company has a relatively small budget, the only option for a competitive advantage over its competitors is price. The company will therefore have to buy generic products. Conversely, companies with greater investment power will be able to work with their own branded products, and this is precisely what will give them the greatest competitive advantage.
The type of product
As with any purchase, the industry type will determine the cost price of the product and the extent of investment. However, it should also be borne in mind that there are sectors like textiles, in which small investments are not profitable. If a company decides to import fashion products from China, it should be aware that buying small quantities is not a great option.
Although it seems like an obvious factor, competition will largely determine whether or not products should be personally branded or whether, on the contrary, they can be sold as a private label without anyone remembering where or from whom they were bought.
This factor, closely related to the previous ones, must be well analysed in market research before starting up any type of business.
Personalising my products, the first step to creating my own brand
If by now you have already realised that you need to create your own brand to import products from China, know that every element you add during the manufacturing process must reflect the identity of your brand.
Two key elements of brand identity are the corporate colours and logo. These two elements can easily be customised with OEM (Original Equipment Manufacturer) goods. This is the name given to products manufactured in China under a private label specifically for the importer to add their customisation during the order.
Packaging is another important element in brand identity. Packaging helps to differentiate products from that of the competition.
As we have seen, the decision to import own-brand or private label products depends on many factors, and may not be an easy decision for some companies to make.
As experts in purchasing management, we at S3 Group, can advise you on the best strategy for marketing your imported products. With more than 15 years of experience, we have worked on all types of projects, importing both own brand and private label products, and always succeeding in operations that have been adapted to the genuine needs of our clients.