In this day and age, a lot of businesses — especially those who sell products online, like HVAC websites — have taken upon the business model of private labeling. This is because private labeling offers a ton of benefits for the business, such as giving the business more control over production, pricing, branding, and profitability, as well as making the products stand out from the millions of other similar products listed online.
With these benefits, it’s not surprising that private labeling sounds incredibly enticing to a lot of businesses out there, especially the HVAC ones. However, even though that is the case, private labeling also offers hurdles. And the biggest one of them is sourcing the best private label HVAC manufacturer for your products.
Related Article: How To Find & Work With Private Label HVAC Manufacturers
What Is Private Labeling?
Simply put, private labeling refers to a brand that is contract manufacturer that is under their own label but is owned by a retailer or supplier who gets its goods from them. In other words, a product under private labeling is one that is manufactured and supplied by one company and offered for sale under another company’s (or individual seller’s) brand.
Through private labeling, a business would be involved in creating their own brand and arranging with their supplier to print or emboss that brand onto the products. The business can even ask the supplier to manufacture customized casing that also features the brand name and logo. Basically, private labeling has become a popular way for online sellers to add value to their product offerings and make their own products stand out from the masses of generic products being sold online.
The Benefits of Private Labeling
As was mentioned earlier, there are a number of benefits that private labeling can offer to businesses. The following are some of the primary advantages that are associated with private labeling.
Higher Profit Margins
Generally speaking, private label products will have higher profit margins than their generic counterparts. Sure, it does cost a whole lot more to get a manufacturer to add your branding to a product, but though that is the case, you will be able to sell the product at a higher price. This is because there is still inherent value in a branded product even if the brand is unknown. Aside from that, private label products also have higher profit margins than established national brands, simply because the items are usually cheaper to make.
An alluring advantage that private label products have is that they stand out from generic resale products on websites like eBay, and Amazon. Because of this, you are essentially setting your business apart from your competitors and, hopefully, giving your buyers more reasons to choose your products. Additionally, private labeling also removes the temptation of competitive pricing since your product is different from everything else out there.
Creating a private label means that you have your own brand. And this brand is going to be something that you own and an asset that you can build upon in the near future. Having a brand is a huge plus for any business out there because it gives your online business an identity. Additionally, a brand can also lead to starting a personal eCommerce store where customers can discover your full range of products. Long story short, branding is all about recognition, trust, and customer loyalty, which are all the things that are more difficult to foster when selling generic resale products.
In addition to making your business more recognizable, having a private label product can also help take your marketing to a whole new level. When you have your own brand, you have more options in terms of marketing, as opposed to when you’re only selling generic products. For one thing, you can choose to create a story around the brand, or you can take creative product photos, build a social media presence, and target your product at specific demographics. Essentially, private labeling provides you with an unlimited range of marketing options, thus helping you increase your brand equity, customer loyalty, and sales.
The Risks of Private Labeling
Even though private labeling is undeniably beneficial to a lot of businesses, it actually also offers a few possible risks. Here are the most common risks that businesses have faced because of private labeling.
Low Quality of Products
The primary risk of private labeling is the quality of the products. This is because sometimes, with private labeling, you are taking the risk of putting your brand on a product that is not manufactured properly or is made of poor-quality raw materials. And once this poor-quality product makes it into the hands of your customers, your brand — and by extension, your business — will definitely suffer. For this reason, it is incredibly important for you to find a private label manufacturer that you can trust. Additionally, it is also crucial for you to test sample products before committing to your first big order.
Aside from the quality of the products, you are also taking a risk on the reliability of your manufacturer and supplier. Consider these worst-case scenarios: what happens if the manufacturer you’ve chosen takes too long, makes a bunch of mistakes, or suddenly goes out of business while you’re working with them to create your private label product? All these scenarios will definitely affect your business negatively, and so, it is imperative that the manufacturer you will choose is reliable. However, even when you’re careful when it comes to the private label manufacturer that you want to work with, you still can’t really eliminate entirely the possibility of ending up with an unreliable manufacturer.
As a private label seller, you are likely going to be liable for the product you’re selling. This can be a risk, especially when the product is inherently fragile or dangerous (i.e. HVAC electronic components). This is even more of a risk in the United States where civil lawsuits are common. Sure, sometimes, private label retailers can seek to shift liability to the manufacturer, but this is something that needs to be established before you start selling the products. Additionally, there is also the option of liability insurance for your business.
In addition to liability, selling a private label product with your brand on it also leaves you open to potential legal issues. Because of this, you need to be aware of trading regulations, possible trademark or patent risks, as well as the safety risks that are mentioned earlier. You might also need to be wary of any words you use or claims you make on your packaging to prevent potential legal challenges. If you choose to ignore all of these warnings, then there is a high chance that you might go into competition with a big-name brand and they see you as a threat. As a result, they might take legal action against you to either slow you down or shut down your business completely.
Manufacturers for Private Labeling
Despite the fact that private labeling comes with a few risks, the benefits it offers still prevail. And so, as of right now, private labeling as a business model is taking the world by storm. You can definitely choose to employ private labeling for your HVAC business, and if you do decide on this, then you need to do one important thing. And that is, to carefully search for the best private label HVAC manufacturer for your business — a task that is actually a lot more difficult than it sounds.
Simply put, a manufacturer is defined as a person or company that makes goods for sale. In other words, these are the companies that take raw materials and process them into various products. After the manufacturing of these products, they are then sold, usually at wholesale value, to retailers.
What to Look for in an HVAC Manufacturer
There are so many manufacturers for HVAC out there. And more often than not, the sheer number of these manufacturers can make the idea of searching for the best one for your business incredibly daunting. In order to solve this predicament, you need to make a list of the ideal characteristics that you think a private label HVAC manufacturer must-have. To help you get started, here are some of the most common qualities that make for a trustworthy and reliable private label HVAC manufacturer.
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This one is a no-brainer: of course, you would want to find a manufacturer that specializes in producing your type of product, which in this case is HVAC. This is because manufacturers that have a track record in your particular niche will have valuable knowledge about the industry, particularly about product trends. In other words, manufacturers who specialize in producing HVAC products know what makes these products high-quality. And naturally, you’d want this kind of manufacturer.
Securing a great price from the manufacturer means that your profit margins will be higher. Because of this, you will want to shop around. It’s actually a great idea to request quotes from five different manufacturers so that you know you’re getting a competitive price. The primary difference between private labeling and drop shipping is that you’re negotiating the price for adding your branding and any other features to the manufacturer’s product. When you’re still just in the phase of shopping around to see the competitive prices of manufacturers, it’s highly recommended that you inquire about pricing for sample products, minimum quantities, discounts for bulk buying, and shipping costs.
Product quality is arguably the most important thing to look for in a private label manufacturer. The best way to make sure that the manufacturer you have your sights on produce high-quality products is to do your research on forums and eCommerce websites. It’s also a good idea to get samples of your private label product made so that you yourself can test them before they go to market. Some sellers even visit the factory to oversee the production process before committing to a manufacturer. If you have the means to do this, then it’s advisable that you do so. But if not, you can just compensate by doing a lot of research on the Internet.
Before committing to a manufacturer, you should make sure to ask them about delivery times. Any delays in getting your private label product to your store will definitely result in lost sales and unhappy customers. In other words, you should probably avoid those manufacturers that are known for having unreliable delivery.
Track Record of Product Defects
Another thing that you should check on your possible manufacturers is their track record with product defects. This is something that is definitely difficult to find — because, of course, manufacturers won’t publicly announce their track records with product defects. But if you dig a little deeper, you should be able to find some feedback online — both positive and negative — from other sellers who have worked with these manufacturers.
Related Article: Top HVAC Wholesale Supplier & Manufacturers in Canada 2020
Domestic vs. Overseas Manufacturers
In addition to the aforementioned qualities of an ideal private label HVAC manufacturer, another thing that you might want to consider is whether you want to source your products from a domestic manufacturer or an overseas one.
Basically, “domestic” refers to manufacturers located within the country where your business is also located while “overseas” refers to those that are located outside the country. Both kinds of manufacturers have their own share of advantages and disadvantages, and as you’re searching for a manufacturer for your business, it’s important to be aware of all of them.
For domestic manufacturing, here are the advantages and disadvantages that are associated with it.
- High-quality manufacturing and labor standards
- No language barrier
- Market appeal of locally made products
- Faster shipping
- Higher payment security and resources
- Easier to verify reputable manufacturers
- Higher manufacturing costs
- Less product choice, especially in North America since there are many items that just aren’t made in there anymore
Meanwhile, for overseas manufacturing, here are some of its common advantages and disadvantages.
- Low manufacturing costs
- A high number of manufacturers to choose from
- One-stop services like Alibaba, IndiaMart, and Made-in-China exist to make it easy for businesses to navigate suppliers.
- Usually lower manufacturing and labor standards
- Little intellectual property protection
- Language and communication barrier can be difficult to navigate
- Difficult or costly to verify manufacturer or visit on-site
- Longer shipping time
- Product importation and customs clearances
Related Article: Top HVAC Wholesale Supplier & Manufacturers in China 2020
How to Source the Best Private Label HVAC Manufacturer for Your Business
Now that you know all the things that you must look out for in private label manufacturers, it’s time for you to actually start your search. As was mentioned earlier, sourcing for private label manufacturers is actually a lot more difficult than it sounds, and sometimes, some sellers just give up the search altogether. To help you tackle this monstrosity of a task, here are some tips and tricks on how to source amazing private label HVAC manufacturers. Try some of these out, and you might actually find the perfect manufacturer for your business.
Check Out Stores or Other Sellers That Specialize in HVAC Products
If you’re still a little bit overwhelmed by the idea of going through the wide sea of manufacturers to find the one that is perfect for you, then you can start with something small and simple. You can go check out other stores and sellers that also specialize in HVAC products.
Be specific when it comes to your search. Search for manufacturers that specialize in condensers, evaporators, copper components, fan motors, etc. Then check the quality of their products — whether you physically check them out or you read reviews about them online. If you’ve found a particular seller with a line of products that are impressively high-quality, then read their packaging and see who the manufacturer is. Once you’ve found the name of the manufacturer, you can begin your deep dive into researching that particular manufacturer and see if they’re the right fit for you.
Web Surfing and Manufacturing Directories
Another relatively simple way of sourcing private label manufacturers is to go into the web and just surf. As of right now, our world is currently dominated by the Internet, which in a way is a good thing because the Internet provides instant access to a lot of information. And so, you can search for private label manufacturers and get countless lists of them.
In particular, you can try out going to forums like Reddit, Warrior Forum, and Salehoo Forum and ask people there for recommendations. You can also try out online directories of suppliers. Some of the most popular directories for HVAC suppliers out there include SaleHoo, ThomasNet, Makers Row, and MFG. In terms of overseas manufacturing, you can also try out the incredibly popular websites for suppliers, such as Alibaba, AliExpress, IndiaMart, Made-in-China.com, TradeIndia, and more.
Long story short, there are many sites on the Internet that will provide you with recommendations on well-reputed private label HVAC manufacturers. You just have to find these sites yourself and start browsing or asking around.
The first two tips might seem doable and easy for you, but there might come a time that the search will still get a little too overwhelming. And when it gets too overwhelming for you, you might not have the motivation to get back to the search anymore. If this is the case — if you find that deciding on which manufacturer to choose is too difficult — then you can consider third-party sourcing.
There are actually a lot of companies out there whose job is to find high-quality overseas manufacturers for you. The most popular example would be Trillion Source. On a website like this, all you have to do is to tell them what products you want to sell, and they will help you source manufacturers who will print your brand on products with custom packaging.
Sure, this particular tip has its own downsides. For one thing, you won’t be able to get the same hands-on experience as the previous tips offer. And for another, there will also be a few more extra fees to consider. However, even though that is the case, third-party sourcing is still a good way to source the best private label manufacturers. And for that reason, it is a tip that is definitely worth considering.
Takeaway: How To Source The Best Private Label HVAC Manufacturer
Over time, we have seen countless market trends and business models come and go. And as of right now, the one business model that is currently taking the world by storm is private labeling.
Generally speaking, private labeling refers to a brand that is owned by a retailer or supplier who gets its goods by a contract manufacturer under its own label. This particular business model offers a ton of benefits, such as higher profit margins, exclusivity, branding, and more marketing options. And for that reason, so many companies — especially the HVAC ones — have decided to apply this model for their respective businesses.
If you’re one of those HVAC businesses that have decided to take upon the private labeling model, then one thing you must do is to find the best private label manufacturer for you. This is actually a lot easier said than done, and in order to deal with this predicament, you need to know the things that you must consider when choosing a manufacturer. Some of the things that you need to know are the qualities that make for an ideal manufacturer as well as the location of the manufacturer.
And once you’ve considered these things, all you have to worry about now is where to find these manufacturers. And luckily for you, there are actually a lot of outlets that will help you achieve this task. There are forums where you can ask for suggestions. There are sites full of suppliers and manufacturers that you can browse. And if you don’t like doing all of this by yourself, then you can hire a third party to look for manufacturers for you.
Whether you’re just new to the whole private labeling game or you’ve been entrenched in this practice for some time now, you should be able to breathe a little bit more easily. Sure, the idea of sourcing the best private label manufacturer sounds incredibly intimidating, considering that there are so many of these manufacturers that you don’t know where to begin to look. But on the flip side, there are also a lot of options in which you can deal with this task, thus making this incredibly intimidating task a little bit more endurable.