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The Benefits of Branding
By: Josannah Birman
Posted: October 26, 2009, from the November 2009 issue of Skin Inc. magazine.
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She also notes that many formulas can be easily tweaked to give them your own signature twist. “For example, depending on the product, a preferred scent may be added,” says Simon. Another way to make private label products stand out is to select packaging that truly represents your spa and your mission, and many private label suppliers offer this service, as well.
Sales and marketing
Beyond branding, private label skin care and cosmetics also offer another economy-specific benefit—they can be extremely profitable. In fact, the recession spurred Rebecca James Gadberry, co-CEO and chairman of YG Labōratories to do a total review of the products and programs the company offered to spas. Ultimately, it was discovered that clients who take advantage of private label programs earned 10–30% more than those who didn’t.
Private label products offered at Ummel’s spas can carry a markup of 300–500%. Even with this, she is able to offer a mid-priced range of product to clients. But clients often aren’t the only ones who save by buying private label. Spa owners cut costs by avoiding the expense of custom formulas and high product minimums that often come with branded products. “This allows spa owners to rotate in new products that help attract consumers and test what products are successful,” says Simon.
Clark warns, however, that just because it says your name on the bottle doesn’t make private label products easier to sell than branded products. “It is best to try all the products that are of interest to you and make sure you really love the products, and the company you work with appreciates your business and will help you,” says Clark.
One of the key aspects to a product line that is successful at retail is the marketing support it receives. “Some private label companies offer additional services, such as labeling, marketing support and training, so you will have to determine where you need the assistance the most,” says Clark.