Dropshipping and private labeling are two popular ecommerce models. But can you combine these two models to add your branding to the products you sell?
The answer is a big yes!
It's possible to combine dropshipping and private labeling to create a unique brand and sell products without holding any inventory.
In this article, we'll explore private label dropshipping and discuss the benefits and challenges of this business model.
We'll also provide some tips and strategies for successfully implementing this approach and building an ecommerce business.
Can you combine dropshipping and private labeling?
Yes, dropshipping and private labeling can be combined to create a unique ecommerce business model called private label dropshipping.
In private label dropshipping, you work with a manufacturer or supplier to create products with your branding and list them on your online store.
When a customer places an order on your store, the manufacturer or supplier will fulfill the order and ship it directly to the customer on your behalf.
Since the supplier handles production and logistics, you can focus on customer service, marketing, and other aspects of growing your business!
That said, finding a reliable supplier willing to do private label dropshipping can be challenging. This is because adding your logo to small-quantity orders is often not cost-effective for them.
We’ll discuss more on how to find private label dropshipping suppliers below.
But first, let's understand the pros and cons of combining the two business models.
The pros of combining dropshipping and private labeling
Combining dropshipping and private labeling offers several benefits. Here are some of the pros of this business model:
- Scalability. Dropshipping allows you to scale your business faster than traditional business models since you don't need to manage the inventory. You can easily expand your product range without the worry of expenses.
- Brand recognition. Combining dropshipping and private labeling allows you to create a unique brand with your own logo and packaging. This also helps you stand out from competitors who sell generic items.
- Low investment costs. Private label dropshipping doesn't require you to hold inventory. So you save on manufacturing, storage, and distribution of the products, which makes this model appealing, especially if you're on a low budget.
- Higher margins. A product's perceived value automatically increases after you add your brand to it. Customers are also willing to pay more for such products based on the brand name. So you can increase the product pricing and see higher profit margins with minimal stress.
- Loyal customers. Just by adding your logo to the products, customers are more likely to remember you and buy from your brand again. And as a bonus, if they like the product they have bought, they are also more likely to check other products in your store.
The cons of combining dropshipping and private labeling
While combining dropshipping and private labeling has several advantages, there are definitely some drawbacks you need to be aware of.
Here are some of the cons of this business model:
- More expensive. Private label dropshipping costs more than generic dropshipping. You can expect to pay more for product samples to account for additional printing and time needed to create custom logos.
- Hard to find suppliers. Most private label suppliers hesitate to manufacture goods for dropshippers in advance due to the risks involved in carrying the inventory until the products are sold. So you’ll likely need to show your sales history to prove you’re a reliable dropshipper.
- Higher minimum order requirement. Private label suppliers typically require a minimum order quantity before manufacturing a product. That can make testing the market and assessing demand difficult before committing to an order.
- Quality control. Since you rely on a supplier to fulfill orders and ship products directly to customers, you’ll have less control over the product quality and the shipping process. This can lead to negative customer experiences if the products are of low quality or are not delivered on time.
- Slow-moving items. You’re entirely responsible for your privately-labeled goods. That means you must find a way to sell slow-moving products.
Getting started with private label dropshipping
If private label dropshipping appeals to you after considering the pros and cons, then let's help you get started!
While starting a private label dropshipping store is similar to a traditional one; there are some key differences to remember. For example, you'll need to focus more on branding and finding the right supplier.
Use this guide to start your journey toward building a thriving private label dropshipping business.
Step 1. Product research
The first step in starting a successful private label dropshipping business is finding a product your target audience wants to buy.
If you're new to the game, it's best to choose a niche you're passionate about or have experience in.
Need help deciding?
Check out our article on 14 private label product examples for dropshipping.
Once you've narrowed your list, it's important to validate your idea before investing resources into developing the product.
You can use keyword research tools like Google Keyword Planner or Ubersuggest. But if you're looking for product research tools explicitly made for dropshipping, we've covered you with our list of free tools.
And don't forget to explore social media platforms like Instagram, TikTok, and Pinterest for more inspiration.
Step 2. Find a private label supplier that supports dropshipping
Now that you have decided on a product and niche, it’s time to find a reliable private label dropshipping supplier.
Unfortunately, finding the right private label dropshipping supplier can be a daunting task since not many private label suppliers are interested in doing small orders.
But don't worry; we’ve curated a list of the best private label dropshipping suppliers in 2024.
You can also find private label dropshipping suppliers in your country or city by simply using the following formulas in search engines like Google:
- 'Private label + product + dropship + country'
- 'Private label + product + no minimum + country'
Step 3. Build your private label dropshipping store
Creating an online store that is attractive and user-friendly is crucial as it's the face of your brand on the internet.
It may seem overwhelming to build a website from scratch. But trust us, nearly all store owners have gone through the same rollercoaster of emotions. So don't worry; the end result is worth all the effort!
To understand all the necessary steps before launching your store, you can go through this dropshipping checklist, which includes necessary steps like the following:
- Build an online store using Shopify or WooCommerce.
- Purchase a domain name.
- Design your brand logo.
- Add products to your store.
- Add engaging and informational product descriptions.
- Adding apps to your store.
- Create standard pages like contact us, return policy, and about us.
If you need help setting up an online store, feel free to read our guide on how to create a dropshipping store with Shopify. It's quite detailed but covers all the essential steps you need to take before you launch.
Step 4. Launch your online store
After you build an ecommerce store, now it's time to launch your private label dropshipping business!
But before launching your store, it's important to put yourself in your customer's shoes and test everything on your site. For example, check if the checkout and abandoned cart emails are working correctly.
Step 5. Develop a unique brand
The last step of starting a private dropshipping business is to market your products online.
After launching, you want to attract customers to your store by promoting your brand. If you’re on a low budget, you can get free traffic from social media platforms, online forums, email marketing, and starting an affiliate program for your store.
Wondering how? Check our detailed guide on eight ways to get free traffic to your dropshipping store.
But if you aren’t on a tight budget, you can look into paid advertising options like Google Ads, Facebook Ads, and Pinterest Ads.
Best practices for dropshipping private label products
The combination of dropshipping and private label products can result in great outcomes!
Here are some best practices for dropshipping private label products:
- Ensure your supplier is reliable. Look for a reputable private label supplier with a proven track record of quality products and timely dispatch.
- Order samples. Always test the branded products before you add them to your store. Even if the supplier sends images of the sample product, it’s best to get it sent to you so that you can evaluate the overall quality yourself.
- Build a professional website. Since you're outsourcing production and inventory management, you must give your best shot at building a site that reflects your brand's values and attracts your target audience.
- Test and optimize. Continuously test and optimize your website, product offerings, and marketing strategies to improve your conversion rates and customer satisfaction.
- Provide excellent customer service. Respond promptly to customer inquiries, resolve issues quickly and professionally, and go the extra mile to exceed their expectations.
- Stay up-to-date with trends. Check the latest trends and best practices in your niche to stay ahead of your competitors.
Summary
Before we go to the conclusion, we've created a quick summary of this article for you, so you can easily remember it:
- The combination of dropshipping and private labeling is called private labeling dropshipping.
- The advantages of combining dropshipping and private labeling are scalability, brand recognition, low startup costs, higher margins, and loyal customers.
- The disadvantages of combining dropshipping and private labeling are more expenses, difficulty in finding suppliers, higher MOQ, and quality control.
- The steps involved in creating a private labeling dropshipping business are the same as that of a traditional dropshipping business. You'll only need to focus more on finding a supplier and establishing a unique brand.
Conclusion
Combining dropshipping and private labeling can be a winning strategy for your store in 2024.
You already know the drill if you’ve run a dropshipping store before. Just that you should make branding and selecting the right private label supplier your priority.
But if you’re new to dropshipping, we might suggest you get started with the traditional dropshipping model.
As always, please comment below if you have any questions or need our help!
Want to learn more about private labeling?
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