Dropshipping is a popular strategy for ecommerce merchants to start selling online. It’s not only easy to set up and maintain, but dropshipping also has many benefits that make it an attractive option for many businesses. However, one downside of dropshipping is that your ecommerce store doesn’t have control over the products or their quality. That is where private label dropshipping comes into play. This allows you to expand the products you are offering without having to do all of the research and development needed to launch something new. Let’s dive into the benefits of this method and how it can transform your online business.
What is Private Label Dropshipping?
Private label dropshipping is the process of selling products from manufacturers under your own brand. You don’t have to worry about the distribution, shipping, or customer service for those items. All you have to do is set up a wholesale account with trustworthy suppliers and then resell their products on your website through an ecommerce platform like Shopify or Bigcommerce.
Many people choose this method over traditional ecommerce dropshipping because it’s much cheaper and easier than running your own warehouse with inventory that could sit there for months without being sold. You can build a solid brand identity with little upfront costs or work from traditional startup creation.
What are Some Examples of Private Label Dropshipping?
Practically every major brand in the world features some sort of private label product line. Target uses the Simply Balanced brand to replace Archer Farms and the Good & Gather brand for generic food and beverage options.
At Costco, you can find everything from chili to toilet paper with the private label Kirkland which is actually owned by the wholesale membership giant.
The point is that being able to expand your product line without the investment of research, marketing, development, or shipping vastly improves your revenue streams. All it takes is some effort on the digital side of your ecommerce store to create a new listing and then use a tool like WooCommerce Xero integration plugin from OPMC, so your frontend online store communicates with your backend dropshipping and accounting management.
Private Label vs. White Label Dropshipping
A private label dropshipper is someone who does not own the products that he or she is selling. Instead of owning the product, a private label dropshipper will buy it from a supplier and then resell it to their customers.
By contrast, a white-label dropshipper is someone who owns their own brand and sells products that they have created themselves through their own manufacturing processes. In other words, they are both an ecommerce store owner and manufacturer at the same time.
Private Label Dropshipping Benefits
1 – Product Quality Control
You get to sell products you actually believe in. If a private label dropshipping store sells something that the owner doesn’t believe in, they won’t do well. More importantly, they won’t be able to attract customers who want to purchase something they believe in.
However, if you have your own brand, then you can control the quality of your product or service and make sure that people buy what they really want—not just because it was available at an attractive price point or because it has been hyped up by other people with an agenda (like influencers).
2 – Increased Profit
When you start your own private label dropshipping business, you have the opportunity to earn higher profit margins than when you work with a brand name. This is because several costs go into running a traditional ecommerce store that doesn’t exist when you sell products from your own warehouse. You do not have to pay for physical space, inventory, packaging, and shipping. Instead, your primary expense is marketing.
3 – Product Exclusivity
You can offer an exclusive product. Let’s say you want to sell a t-shirt that has the slogan, “I love my dog.” You can easily find this same t-shirt on Amazon and other platforms, but with private label dropshipping, you are in the driver’s seat when it comes to pricing and marketing your own brand. That way, the unique items on your ecommerce store are yours and yours alone.
4 – Build Customer Loyalty
You can create loyal customers by providing them with excellent customer service and building their trust. You can also get loyal customers by offering them exclusive deals, discounts, and promotions.
When you have more profit margins due to private label dropshipping, you have greater flexibility to invest in relationship building and features your customers talk about the most. This added capability allows you to differentiate yourself in the market while creating more brand trust.
5 – Added Wholesale Revenue
You can also sell your products wholesale to other businesses and individuals. These buyers can then resell the product on their own websites and marketplaces, or they can sell the items in their brick-and-mortar stores.
By creating a brand behind your private label merchandise, you are building a mystique that consumers will want to enjoy. Think about your favorite brands and items. Odds are they were not actually manufactured by the brand you purchased them from. That doesn’t prevent you from wanting to purchase whenever there is a sale.
Get Started Now
When you start building your private label dropshipping company, try to integrate backend tools that make the entire experience easier to manage. The two that we suggest are WooCommerce Dropshipping and Xero WooCommerce integration. These are both developed by the expert team at OPMC.
The goal is to automate most of your accounting and communication needs using both bespoke plugins. That way, the entire purchase cycle happens even when you are sleeping or on vacation. The Xero WooCommerce plugin integration is significant because it communicates orders, customer data, and inventory management directly to your Xero accounting service. When it is tax season and you are managing your profits, active reporting through this plugin makes everything easier to understand and reconcile.
Good luck, and we hope this overview gives you the insight needed to grow a successful private label dropshipping brand of your own.
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