With the pet industry growing more competitive, pet specialty retailers are doing everything they can to stand out from the pack. At this time, the same pet product can be purchased across a variety of channels ranging from big box stores and e-commerce to the neighborhood boutique down the street.
When every channel of the pet industry is selling the same products and services, how can one stand out from everyone else? One way is to offer private label pet products to customers: a trend that is increasing in popularity year after year.
In the past, private label products were reserved for the big box retailers who could afford the high minimum order quantities. Now, manufacturers are lowering their MOQs so smaller stores can participate.
If you've been considering getting into private label, here's how you can start ramping up your efforts and stand out from your competitors.
1) Solidify Your Brand
Before you begin your hunt for a manufacturer who will produce your products at the cheapest price, take a step back and complete a brand audit. Believe it or not, your private label products are more than just a product: it's an extension of your brand. Therefore, these products should reflect everything your brand stands for.
For example, if you're an all-natural boutique specializing in organic and high-quality pet food, your private label pet food should reflect that. Using simple, all-natural, high-nutrient ingredients with a clear and concise label will emphasize your brand's standpoint, rather than dampen it.
Think about it: if a customer picked up a bag of cheaply produced dog food with your name on it, would you be proud of it?
Before you create your private label products, make sure your customers love and trust your brand. This way, you are sure to be successful in creating brand loyalty with these products.
2) Do Your Research
Once you're happy with your brand's positioning, it's time to begin the research process. During this exercise, you're going to decide two crucial points before even choosing a manufacturer for your products.
1. What category(s) the products will encompass
What category of pet products are you open to creating a private label for? The answer may seem obvious to some while others may have no clue where they want to start. To decide what category to create a private label product for, start with asking yourself the following questions:
- Are you opting for consumables or hard goods?
- Are you willing to go into pet food, or strictly stick with pet treats?
- What categories do you have strong ties to you existing vendors in?
- What can you do better (in terms of product quality) than your vendors?
As an example, Pacific Northwest retailer Mud Bay began its private label program in the treat category. Since coming out with their Mud Bay branded bulk biscuits, they've found a lot of success. One would think that this success would naturally lead into success in pet food. However, Al Puntillo, the chief merchandising officer at Mud Bay, has decided not to go that direction.
According to Puntillo, "we partner too closely with our food brands, and we feel that is kind of sacred ground—not to mention the risk and liability that goes along with a potential recall or something like that. We would rather keep our relationships on the food side pure.”
2. How your products will be positioned
Once you know which category to dive into, it's time to determine where your products will be positioned within that category. There are essentially three positions to choose: good, better, and best.
In our article, "How to Identify a High Quality Small Animal Food," we explained the difference between the three positions for each type of small animal food. If you're looking to other categories, here's what they look like from a general perspective:
Products that are a part of the "good" quality positioning hold the consideration that they are budget-friendly. These products are at the opening price point of the category and what they don't have in quality they offer in price.
Word of caution: There's nothing wrong with opting for this positioning, but note that it has the potential to cheapen your brand image. Therefore, if you pride yourself on selling high-quality products but also want to offer a budget option, your image may become degraded by using your name on that low price option.
This is the middle-of-the-row every-day generic product. It's not cheap, it's not premium; it's somewhere right in between. This may cost about 20-30% less than the most premium brand offered in that category and is a great option for those who will fudge on quality just a bit to get a decent price.
When done correctly, the "better" section is a great option for retailers looking to offer a private label pet product. Note that other brands will be using similar positioning, so finding another way for your product to stand out is essential to gaining any type of market share with your customers.
Products that are under the "best" category are the cream of the crop. These are the products that are sourced and manufactured in the upmost conditions and with the highest quality ingredients, materials, and procedures that they can be.
The problem? The price tag comes along with that quality. While it's not impossible for private label to be the premium product on the shelf, it's very difficult to be successful there. With that said, if there's a way you can produce a product better than your manufacturers, then go for it!
3) Select a Manufacturer
Now that all your research is done and you've decided what kind of product to produce a private label for, it's time to find a manufacturer who will create it to your exact specifications. While it may have taken some time to get here, it's best to know exactly what you're looking for before letting someone else manufacture it for you.
Not sure where to start when looking for a manufacturer? Try asking one of the ones you already work with. Believe it or not, many of your vendors might already offer private label programs - or at the very least, be open to starting one with you. This especially works well when you have a great relationship with the manufacturer and they produce the quality level of products that you're looking to reproduce under your private label.
When looking for a manufacturer, try looking for those whose home base is located close to your store's operations. It's much easier to negotiate, monitor, and work with vendors who have warehouses and factories within a few hours from you.
Determining a manufacturer for your products is meant to be a well-researched process that shouldn't be rushed. Consider everything from ingredient quality (for consumables) to where things are sourced and manufactured.
Take tours of factories to monitor processes and identify whether their procedures match the quality you're aiming to uphold. All of these factors will go into ensuring your private label pet products don't flop as soon as they hit the shelves.
Thinking about starting your own private label program within your store? Talk to us - we've got some of the pet industry's highest quality and best-to-work with brands across a variety of pet product categories. We would know, we have to work with them every day!
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