There are many advantages for importers, distributors and retailers to sell private label products. Although private label products can be a uniform, labels and packaging can be custom tailored to achieve a degree of uniqueness in the market. Retailers can use their own product name, company’s logo, description and contact information. This ensures that unique brand can be created easily. Because production and shipment costs are predictable; importers, distributors and retailers have more control over their pricing strategies. Distributors are able to manage their inventory stock and retailers can create their own proper marketing plans. Higher margins allow for greater profit opportunity. Private branding ensures that unique and personalized images can be created. This ensures a stronger customer loyalty.

Retailers can acquire mature, well-developed private label products. Manufacturers may allow a degree of customization, not only on the packaging, but with the product itself to ensure proper branding positioning. Many business aspects can be controlled and unique products can be created easily. In many countries, private label goods already account for half of the products sold in various stores. Private label products in China are available in a diverse range of products, including cosmetics and food. Retailers with strong brands are often able to seize significant market share, although they don’t develop and manufacture the product. Their brands are enough to build recognition and value from the customers.

Developing new products may negatively affect our existing brands. They could have notoriously high rates of failure, due to various technical shortcomings associated with immature technology and manufacturing process. Glitches, flaws and bugs could reduce consumers trust on the brand. It could be costly and time-consuming for companies to prevent product failures. The product can be so new that consumers still don’t have compelling motivation to buy. Consumers are in love with product capabilities, features and coolness. Unfortunately, less-known technology won’t result in increased sales. During the development process, it is possible that consumer needs are exaggerated.

Improperly developed products could also be poorly segmented and when the products fail to address customers who share similar problems, your brand may suffer. There’s no guarantee that new products are able to meet customer expectations and primary benefits may not be delivered. With private label products, it is less likely that your brand will be messed up by poor product concepts.