private labeling

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chilidan
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2012/07/18 01:57:20 (permalink)

private labeling

Hello all, I'm mostly on the hot dog forum but have a question. Anyone have any experiance in private labeling someone's product? Let's use mustard as an example: a smaller company agreed to let me order from them and put my own label on it. So, now I have my own "mustard" I can sell with my name on it. Sounds easy, any thoughts?
#1

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    CCinNJ
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    Re:private labeling 2012/07/18 02:37:11 (permalink)
    You'd have to consider the POP factor. Paying over profit (to them)= pricing over profit (for you). How much profit can you squeeze out of a jar of mustard? It would have to be the mustard of all mustards...and still there is a price point in that catagory. Then take into account a low minimum cost of labels and the process of labeling.

    Philippe's in Los Angeles has a very popular mustard (their own formula going back a hundred years)...at a sales price of $5 a bottle.

    http://www.philippes.com/...ppe-s-hot-mustard.html

    They can dictate a price because it's their own special mustard and I'm sure it's a good marketing move...after so many requests from customers.

    So you would need a private label company who needs the business....has a wow product...a customer base that wants to take it home at the price way higher than any mustard in the Supermarket ...sets a low minimum...even before the cost & effort of labeling.
    post edited by CCinNJ - 2012/07/18 02:41:59
    #2
    roadkillgrill
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    Re:private labeling 2012/07/18 03:12:10 (permalink)
    My main concern would be, why would you want to take on another companies product liability for a smaller piece of the pie, for a product that you dont have manufacturing control. Such as a "foreign object" ends up in the bottle during processing. It's your name on the bottle not theirs, thus you are held liable. You would have to sue your supplier separately. This would be a move only after you have produced the mustard yourself and the  demand has grown beyond your ability to bottle it yourself. IMHO... 
    #3
    RodBangkok
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    Re:private labeling 2012/07/18 03:36:00 (permalink)
    If the company that you want to buy from is already doing the licensed processing and packaging, then you should negotiate with them to have a private label version done with your Brand label and their processing and packing info.  If they are using a co packer, then negotiate with the seller to use his co packer and have that co packer put your label on the product, again with all the necessary licensed info.  The label may read something like processed and packaged by Acme under license from such and such company for you.If the guy your buying from is doing this formulation out of his house with no co packer, then you must get a co packer to be able to sell it.Some info on Co Packers found here: http://www.ces.ncsu.edu/d.../pubs/copackers.htmlOf coarse you also need to think about the profits each step takes, and the min order quantities involved.
    #4
    Foodbme
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    Re:private labeling 2012/07/18 05:04:21 (permalink)
    Depending on what you're packing, and if you're going to be selling it interstate,you may be required to submit the label to the USDA or FDA for approval. Some products require ingredient and nutritional info. If not selling Interstate, some States require you to submit the labels to their state agency. A qualified Label company should be able to provide the answers.
    #5
    chilidan
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    Re:private labeling 2012/07/18 12:45:34 (permalink)
    I was going to leave the nutrition and ingrediant info on there, just the main label will be different. I agree with the above comments the liability of course, and the cost  of even making a profit. The main concern is, if  I did relabel a product and the demand did start to get bigger, what legal suprises (other than the liability factor) could I face that I don't know about. Given I have permission from the company.
    #6
    CCinNJ
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    Re:private labeling 2012/07/18 12:50:48 (permalink)
    If/when there is a possible recall of product issued by the FDA...due to a number of factors that have nothing to do with you personally.
    #7
    Chicnscoop
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    Re:private labeling 2012/07/18 15:15:58 (permalink)
    Be sure there are no other licensed companies using the name you put on it or you could be infringing on someone elses licensing.
    #8
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