The sales of private label products have steadily increased in the last several years. A big reason for it is the economic downturn that has occurred before citizens have become more budget-conscious, and whereas before they tend to veer away from value sections in the grocery store, they now flock towards that spot in order to buy the cheaper version of an established brand in the market.
In fact, the market share for total servings of food products served was only at 20% in 2003, but it rose to 30% in the recently concluded statistical findings in 2011. That's a large increase, and companies selling 'name' brands have felt the effects because of it. The resurgence of private label products has started in early 2003. While the economy was strong at the time, the purchasing power of the citizens has dwindled in comparison. Since then, rapid increase in the market share of store label products continue to happen as the economy went downhill year by year. With the help of store label products, there will be no shortage of food no matter how bad the economy gets. Cost of food will always be affordable thanks to the cheaper price of store label products.
Cheap is All the Rage
One contributing factor that led to the bigger market share of store label goods is that the quality of some commodities is up to par if not equal to the quality provided by its name brand counterpart. The packaging might even look cheaper but surveys indicate that this is not likely to deter people from buying store label goods.
Clientele is Ripe for the Picking
There are a lot of aspects involved in establishing steady income from a particular product. But a manufacturing company can get a lot of benefits in taking advantage of private labeling methodologies. Establishing a partnership with a retailer paves the way to a lot of marketing opportunities. A big part of is the retailer's brand name. Even if your manufacturing company doesn't spend too much on advertising expenses, accessibility to your products increases ten-fold if placed in the shelves of a retailer store where a lot of people are hunting for the cheapest product they could find.
The value section where your product is placed is all the advertising that you need. And if the customers are happy, chances are they will keep buying what you have been putting out there. And it has been proven that advertising-by-mouth is an effective means to promoting awareness of a specific product.
From Manufacturer to Retailer
To find the right supplier, the product niche should be identified first; an extensive examination of the market trends needs to be undertaken. Comparisons among other competitors in terms of pricing, and product details need to be done and acted on accordingly. For a smooth transition, your company can hire the services of a store label agency, which will handle branding, market research, and everything else that will help integrate your vision for the product into the final product.