- RESEARCH & AWARDS
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I am in Seoul, South Korea, this month and my thoughts are with small and medium-sized manufacturers around the world all looking for opportunities to expand their business horizons.
I think about Australia, New Zealand, Chile and Peru, South Korea, India, Malaysia, Thailand, Vietnam, China. There are certain areas of the world with highly developed private label manufacturing infrastructure, areas such as Europe, North America.
And then there are the other parts of the world with multiple manufacturers, some with extremely high standards, but not in areas where retailers are yet established enough in private label to offer the major expansion these manufacturers might seek. So they start to think about exporting.
Many think they would like to take their brands, or create new brands to take to these markets. The world’s specialty food shows are full of these manufacturers, with their government sponsored showcases and pavilions and their hundreds of wonderful products. All of them seeking homes for their brands and products. All seeking distributors to carry their products into new markets.
Problem is, the world is not looking for hundreds of new brands. The world already has too many brands. Too many SKUs. And shelf space is not expanding. The great manufacturers of these products usually have nowhere near enough money to market these brands. Who has 15 million, 20 million, 30 million Euros, dollars or pounds?
The answer is, not too many. And even if you do have the money, somewhere between 70 percent and 80 percent of these new brands and SKUs fail to reach sufficient thresholds of sales to sustain their presence in the marketplace.
So what’s to do? The answer is going to be the private label route, nine times out of 10.
So why is the world full of these manufacturers seeking the pot of gold at the end of the branded rainbow? We would all like our brand name to be on everyone’s lips.
But for the majority, that is never going to be reality.
Spend some money on market evaluation. Make sure your product is right and on trend for the consumer. Which channels and retailers to approach? How to build the right sales team?
Designing “go to market strategies” for private label is as crucially important as it is for the major brand owners. It just costs an awful lot less.
So, folks, visit the private label trade shows in China, Europe and the U.S. See what you are up against. Do some benchmark trips to retailers on the continents you think might be interested in your products. Do your homework and then make your pitch.
Your chance of success is much higher of getting going. Your cost of entry is significantly lower. And your chance of hitting the threshold of sales infinitely better.
Do the math! Private branding makes so much sense. New branding that belongs to a manufacturer probably doesn’t.