Buying Private Label Products in China: A Complete Guide

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Importing Private Label Products from China is a shortcut to success. How hard can it be to just pick a product, send over a logo file and start selling something on Amazon? Well, as I explain in this article, reality is a lot more complex than what many importers may think.

Keep reading, and learn why private labelling is not really what it seems to be in China, and why it can be more complex to get an ODM product right – compared to a custom designed product.

We also explain what Startups and SME’s must know about Intellectual property issues, printing specifications – and how much you should expect to pay a logo print! Yes, this is by far the most comprehensive guide on private label imports written.

What is Private labelling?

A private label product is manufactured by Company A, but with the brand name (i.e., logo and packaging) of Company B. In theory, Company A (the producer) provides a ready-made ‘product template’, to which other buyers can apply their own brands.

The benefit of private labelling is that you can create a branded product, without investing into all too much time and money in product development – and tooling. Hence, you can launch a product much faster.

Again, this is all theory, and I will explain later why this is not really how it works out in reality. But, the point is still valid.

With all that said, branding is still a key for startups and small businesses, as these cannot compete on pricing. This is especially obvious on marketplaces, such as Amazon.com, or the incredibly profitable watch brand, Daniel Wellington*

*Daniel Wellington is not a private label brand. However, their branding has been integral to their success.

private label product

Is China the right place for sourcing Private label products?

Private labelling was certainly not invented in China. It has existed for decades in the food, and other, industries. But, Chinese manufacturers have certainly widened the range of items available, for private labelling.

Our customers often ask us whether Chinese manufacturers ‘allow’ their products to be private labelled. The answer is almost always, yes.

Chinese suppliers are, in general, very flexible. They make products according to buyer specifications. The positive aspect of this is that you can essentially get any product out there private labelled.

The bad side is that, well.. Private label products don’t really exist in China. Keep reading and I’ll explain what this means.

Contract Manufacturers are focused on ‘make to order’. They are not ‘proper’ Private Labeling suppliers.

Chinese suppliers are not proper private labelling manufacturers. They are still operating according to OEM ‘make to order principles’. In short, the OEM process can be broken down as follows:

1. The buyer provides a spec sheet, reference samples, applicable safety standards and labelling files

2. The supplier manufactures a product sample for two reasons: First, to learn how to produce the product, and to show the buyer that they have the expertise to do it.

3. Production begins. The supplier procures materials and components from its subcontractors. After this is done, assembly begins.

In theory, private labelling is supposed to work as follows:

1. The buyer browses through glossy catalogs and websites, picking out what they want. The buyer sends a logo file to the supplier, and they work out the rest.

2. The supplier starts production and manufactures the product according to an established set of quality standards and product specifications. The buyer can just sit back and wait for the next batch.

You’ve already figured out by now that this is not how it works in the real world. And, this is why:

a. The suppliers most often do not have a fixed set of product specification

They still want you to provide explicit requirements for labelling, materials, design and product compliance. Yes, even if you intend to buy a (so called) ‘private label product’.

b. They don’t really develop their own products

What you find in the supplier’s catalog are partly products they’ve done for other customers, partly products they want to show that they can manufacture (but never actually did produce, so far).

That said, there are certain exceptions, for example, the Drone industry in Shenzhen.

c. Product catalogs are for reference only

As mentioned, a product catalog is not much more than a case study of what the supplier has produced before, and what they suggest they can make.

I have dealt with companies that have tooling for less than 50% of the products in their catalog. In these cases, there’s nothing but a 3D rendering. No molds, spec sheets or design drawings.

Importing Private label products is not necessarily faster or easier, compared to buying OEM (custom designed) products

So, how do you go about to buy private label products? First, you need to find out what sort of products the supplier has existing tooling for. Second, you need to get a list of product specifications.

However, as many suppliers lack both tooling, and product specifications – you may need to both buy tooling (which partly defeats the reason to buy a private label product) and provide the supplier with a complete spec sheet (which completely makes it irrelevant).

Buyers often find themselves in situations where they must reverse engineer the ‘supplier’s product’. This can be far more time consuming than just hiring a product designer from the very start.

The problem is that the supplier still expects you to provide them with a specification. Even when buying a private label product.

If not, they’ll fill in the gap for you – and that’ll be in a way that benefits them (which means they’ll use the cheapest possible materials and components , to improve their own, meager, profit margin).

Consider ODM products (private label products) as general design templates – nothing more. In the end, the process is still essentially the same as if you’d go for a custom designed OEM product.

The only difference is that you may be able to say that you want the design to be based on an existing sample. But that’s about it.

Buying PL products still require the implementation of a strict Quality Assurance process

As there’s normally no fixed spec sheet, or internal quality guidelines, applied by the manufacturers (remember, they expect that to come from you) – the risk of defective units and damages is always present. Yes, even when importing private label products from China.

As such, your quality assurance procedure is as important now, as if it would be if you’d buy a custom designed product.

You must still order pre-production samples, communicate your quality requirements in the form of a sales contract – and you must follow up with quality inspections after production.

Intellectual property (IP) issues

Intellectual property is another issue that especially Private labellers must deal with. What if you buy a ‘private label product’ that turns out to be patented?

This question was recently answered by Rachel Greer, of Cascadia Seller Solutions. This is what she says:

Typically, we recommend checking if the product you’re trying to sell is the only version of that product on the website, and if so, it’s probably patented.

As an example, there’s a car seat that uses heavy duty suction cups to hang in a window. The suction cups are patented, and so no one else can copy that exact design – only Amazon and the original seller are listing that product for sale.

Sometimes you can also see when something is truly innovative that it is likely patented. There are many traditionally used products, or variations on the theme, that new Amazon sellers can use to build their brands, it’s not necessary to copy someone else’s brand or designs.

That being said, patent infringement is quite hard to prove on Amazon, and typically Amazon will require some sort of proof of successful legal proceeding. Where we see sellers get into trouble far more often is trademark and copyright infringement.

Sometimes, they’re using someone else’s name brand in their product description (never use the name Dr. Oz to promote your supplements!), or using someone else’s photo. Always try to have unique offerings and photos.

Click here to read the full interview with Rachel Greer of Cascadia Seller Solutions

Labelling costs

Having a product branded is not expensive. The price difference between a private label product, and a no-name product, is usually very small.

Printing a logo on a product is most often not costing more than $0.2 to $0.4, per piece. In comparison to the added value (assuming you do it right), that is a very good return on investment.

However, the costs depend on many factors, including placement, the number of colors and logo size. In some cases, suppliers also charge an additional tooling fee (print card cost), ranging between $50 to $200.

pantone color

Printing Specifications

Getting your products labeled is not rocket science, but things can still go horribly wrong. As said, Chinese suppliers are accustomed to a “make to order” approach. Thus, they expect you to provide every relevant specification, in this case relating to the private label itself.

The stakes are high, as the supplier will fill in the gaps if you would fail to provide one or more labeling specifications.

What makes things worse is that many Chinese suppliers will not alert you of mistakes or other issues (for example, incorrect font), even if something is obviously wrong.

Yet, many startups and small businesses fail to realize the importance of providing comprehensive labeling specifications to their suppliers, and instead think that the supplier “should know how to get it right”.

Yes, perhaps they should, but you are the one losing a ton of money when something goes wrong. First, make no assumptions, and second, nothing is too small or unimportant to be included in your labeling specification.

This is what you must include in your label or logo specification:

1. Print type

Your label can be printed, or affixed, to the product in various ways. There’s no right or wrong here, apart from the obvious fact that certain print types are not suitable for some products. Below follows an overview of various print types:

  • Embossing
  • Debossing
  • Engraving
  • Laser
  • Silkscreen print
  • Heat-Transfer Printing
  • Hot stamping
  • Embroidery
  • Sublimation printing
  • Inkjet printing
  • IMD print
  • Water transfer printing
  • Carving
2. Colors

Always refer to a Pantone or RAL color code, depending on which color matching system your supplier is using. Never refer RGB colors or other digital color systems.

3. Print Position

The supplier must know the exact position, on the product, where the logo shall be printed. Thus, you must provide reference measurements, based on the actual product dimensions.

4. Artwork

The artwork must be based on the actual product design. Thus, you must either draft an Artwork template yourself, based on a product sample, or obtain one directly from the supplier.

However, it’s quite common that Chinese suppliers either lack or refuse to provide, artwork templates.

5. Files

Most suppliers prefer to work with the scalable vector file format, EPS (Encapsulated PostScript) or an Adobe Illustrator file (.ai). It’s critical that the files are set with the correct dimensions and resolution.

If you use a non-standard font, you must also provide the font file. Time and time again I see buyers making assumptions about these small things.

PL packaging

Private Label Product Packaging

Most suppliers can offer a selection of standard packaging designs, that can be branded by with the customers logo. The main reason to choose standard packaging, is the MOQ:

  • Custom Design Packaging MOQ: 300o to 5000 pcs
  • Private Label Packaging MOQ: 500 to 1000 pcs

Thus, buyer branded standard packaging is basically the only option for any company, looking to buy less than 3000 units.

So, how do you go about to find out which packaging a supplier can offer?

First, they rarely keep product catalogs, from which you can choose from. Instead, most factories rather have their customers send them a few photos of ‘similar’ packaging options, which they then forward to their packaging subcontractors.

Just keep in mind that you must make clear that you are only looking for standard packaging, not custom designed packaging.

You must also instruct your supplier to confirm the price, dimensions, available colors and the MOQ.

As a Startup buyer, you should focus on getting a product out on a market. While a glossy custom designed box can be a good long term investment, a private label packaging is faster and cheaper to get on the shelves.

Product Regulations

Private label products are subject to the same safety standards and labeling requirements as all products. While most buyers understand this, many assume that ‘private label suppliers’ got them covered, when it comes to product compliance.

The idea is that a ‘private label product’ is developed by the supplier (which is not really the case), and therefore they should ensure that the product is fully compliant.

This is not the case.

At best, you can expect a supplier to send a few test reports. However, a test report is an indication of the suppliers ‘ability’ to manufacture a compliant product.

It is not, by any measure, a document that can be used to prove compliance for your product.

Ensuring compliance, which involves everything from creating the correct labels to lab testing, is the responsibility of the Importer.

Making design changes to private label products

The definition of a private label product is that of a factory standard design, with a custom buyer brand. You can, in some cases, make minor additional design changes:

  • Materials
  • Colors

With that being said, as soon as you make changes to the design, functionality or dimensions, you are no longer in ‘private label territory’, but have already stepped into the realm of OEM products.

Do you want to launch your own private label or custom designed product?

It can be hard to go from a design drawing to finished product. To help you manage the entire process – from creating a specification, to sampling and quality control – we created a Starter Package:

a. Private Label & OEM Product Manufacturer Lists

b. Product Specification Templates

c. Product Label Samples

d. Tutorials, Video Walkthroughs and Task Lists that guide you step-by-step through the entire process

In addition, you can also book quality inspections, lab testing and shipping directly from the platform. Click here to learn more.

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    26 Responses to “Buying Private Label Products in China: A Complete Guide”

    1. Boris C. October 20, 2014 at 12:32 pm #

      Hi Fredrik

      Thanks for writing this article!

      1. When you mentioned logo methods, you referred to logos on products. But when it comes to logo method for product’s box, what color code is used in this case? Is it or RGB this time?

      2. In section about IP infringement I don’t understand why you say if client would have not given you call that day, your career would have been cut short if you are not the one who picked and sourced product for them. They are the ones who confessed about not owning design. It would be their fault, unless they actually asked you to ensure their picked product is not subject to IP infringement.

      That’s actually the issue that many importers do not pay enough attention too. They think if manufacturer makes this item then he must own IP rights to it and making it available to others. But you said manufacturers make OEM which leads me to think that they never develop their own designs and instead remanufacture OEM designs previously made by other companies. I guess what matters here is not whether items are made this way but if these items are patented and have trademarked designs.

      You are not IP lawyers as you wrote below but do you provide anything similar in your services like if product to be sourced has its IP protected?

      I am sure you are familiar with OXO – kitchen utensils manufacturer. I remember report where their competitor accused them of using patent which competitor thought belonged to them while it wasn’t because that’s not original patent. OXO just improved and innovated product having right to do so. Also OXO said they believe in contribution to society by making things better and better and won’t chase after everyone trying to do that. I have report on my computer and can send you if you want.

    2. Fredrik Grönkvist October 23, 2014 at 5:43 pm #

      Hello Boris,

      1. No, you still can’t refer to RGB colors but most refer to Pantone or RAL (depending on what the supplier is using)

      2. I suggest you read this article on Product packaging: http://www.chinaimportal.com/blog/product-packaging-china-guide/

      3. Yes, you are right. From a legal perspective it was certainly not our responsibility, but would still have been a major issue, and it would have damaged our reputation either way.

      4. Many suppliers do invest in R&D, but their designs are rarely entirely unique (which is not saying they are all selling illegal copies). As you say, all products are not patented (trademark is a different thing though)

      5. Yes, we also offer consulting on managing such risks when buying from China

      6. Sure, would be interesting to see that report!

    3. Davidson November 4, 2014 at 3:05 pm #

      Hi Fredrik,

      I plan to import a generic product and wish to differentiate myself through packaging. Is it better to source a separate factory to handle the packaging design (I will provide designs) or do some factories have a separate department that handles packaging design and production.

      If I decide to use a separate factory for packaging, is it a challenge to coordinate between the two factories to match the product and the packaging?

      Thank you.

      • Fredrik Grönkvist November 4, 2014 at 9:06 pm #

        Hello Davidson,

        1. No, I advise you to use a subcontractor of the supplier you choose. Buying products and packaging from two different suppliers may cause various complications (both related to local export tax regulations and design issues). Most suppliers already have established relationships with packaging subcontractors, rather than managing printing in house.

        2. Yes, and if something would ever go wrong, they will most likely blame each other and refuse to take any responsibility.

        • Davidson November 4, 2014 at 9:54 pm #

          Thanks Fredrik. What would you suggest if I find a supplier that I like for the product but the packaging they offer is substandard?

          • Fredrik Grönkvist November 5, 2014 at 5:40 pm #

            Hello Davidson,

            As most suppliers use subcontractors for this purpose, there should always be flexibility in terms of design. That may result in extra tooling costs though.

            In case the packaging subcontractor is unable to meet your requirements, you could source a packaging supplier by yourself, but only consider this as a last resort.

    4. dntmb January 10, 2015 at 3:50 am #

      Hello, thanks for good information.

      Let guide us how to find private label supplier on alibaba or other site. I try to find by keyword but most of result is screen label company. Do you have any suggest or tip to find them.

      Best,
      #dntmb

    5. Kim February 12, 2015 at 3:40 pm #

      Hey Fredrik.
      If I have ordered a clean product without any logos on, can I still get my own buy box on amazon?
      Or do I need to buy my own barcodes for it to be a private label?
      Or how does it work?

      Thanks!

    6. Desmond Bounaparte July 15, 2015 at 7:33 am #

      Hi Fredrilk,

      Good info. Would like to import stuffs to Singapore. Are you still base in China? Any good recommendations for goods with high ROI? Drop me an email. Thanks

      Best regards,
      Desmond
      +65 9619 6639

    7. Casey February 23, 2016 at 2:52 am #

      Hi
      Thanks for the article as I am in the process of getting a Trademark from the USPTO as I already have 1 US patent and this time I’m going with trademark on a LOGO. My question is I have ordered the product from China that I ordered at least 200 pairs of, yes I have a shoe fetish, Anyway they have the symbol on the that is a very large company here and thus company does not make this type of shoe but China makes them. Recently I found they are not selling g or shipping the shoes (expect me because I have there private email) I get so many compliments it’s crazy, people want to take pics and where I bought them which I don’t say, so I figured if I put my LOGO on them and make it legal here to sell I’d be ok. My application is in and I’m not worried about it being denied, like I said I already have a US Patent a d was guided through the process with a friend from USPTO. I’m still able to order these in the meantime and I’m getting emails after emaila from China manufactures from the seller I have been buying this product from. He’s a great guy and know a little more English than most,
      My question is I am in the process of looking for a manufacturer for the product and maybe some advice as of now I am skeptical in sharing my idea but would eventually if we could have a rapport going. I’m interested in corosponding with you if that would be possible. Again thanks for the article!
      Casey

    8. Phil Denis August 16, 2016 at 9:51 am #

      It is an interesting article. What is funny is it always come back to the same topic which is quality, and reliability because in the end this is what people suffer from the most.

      A good way to verify capability of supplier is to perform some Factory Audit, also called Supplier Audit by visiting them directly or sending someone to visit them.

      We do this every day and this is funny to see how diversified the bunch of supplier is in terms of quality assurance capability.

    9. tyler c September 23, 2016 at 9:19 pm #

      ok here is a close example.
      i am trying to buy an electric ballon that can go up and down. a US company already made and patent this product. i see other sellers(not too many 2-4) selling the exact product w/diff private label name and image/description. I asked amazon and they replied saying I CAN list and sell the item as long as i make a few changes, make my own brand name, and use a diff ASIN and amazon registry brand. but my aliababa supplier told me that the company has an agreement with amazon to be the sold seller. so i dont get it? i dont want to be taken down and lose all that money or have the original company send a cease and desist letter? but from what i hear, as long as the brand/item is not huge like apple/sony/nike, you are allow to resell just not under same name/image/etc. thank you

    10. SHENGMIN TIAN January 16, 2017 at 10:17 am #

      Hello

      Thanks for the information. Currently, we are in the process of doing OEM. I would like to know whether it is possible to use the barcode of producer, but our own design and trademark. Is it legal?

      Thank you

      • ChinaImportal January 23, 2017 at 2:54 am #

        Hi Shengmin,

        I think you must buy EAN codes from an organisation, such as GS1UK.

    11. Leandro Francisco March 10, 2017 at 2:41 pm #

      I don’t understand how Daniel Wellington is not a private label brand. I found most of the same watches, without their brand of course, for about $10 on Alibaba. Maybe I’m misunderstanding what private labeling is.

      • ChinaImportal March 12, 2017 at 11:34 am #

        Hi Leandro,

        Those are just replicas of the DW watch. Hence, they can hardly be classified as a private label product.

    12. Yuliana Lentova April 5, 2017 at 11:22 pm #

      Hello,
      Thank you for the great information!
      You mention briefly that it’s the buyer’s responsibility to ensure that the product is fully compliant and meets the safety standards and labeling requirements. But can you explain further how it is done if it involves everything from creating the correct labels to lab testing?
      Thank you very much!

      • ChinaImportal April 10, 2017 at 3:09 am #

        Hi Yuliana,

        Yes, that is correct.

        For example, the buyer must create the label files (and make sure that they comply with regulations). As for lab testing, it is up to the buyer to collect samples and book the correct tests.

        Same thing goes for documents, or even confirming which standards / regulations apply to a given product, in the target market.

        The key here is to understand that manufacturers are, well, manufacturers – not lawyers or compliance consultants.

    13. Rob Park April 6, 2017 at 9:01 pm #

      Hi Boris- Thank you for having this forum available. I am looking to buy some promotional shaker bottles to giveaway with my logo thru Alibaba. The Blender Bottle Company has design patents (according to their website): https://cdn.shopify.com/s/files/1/1099/1898/files/USD510235S1-S1697.10018US01.pdf I wanted to know if I will run into trouble for buying these bottles with my logo on them to give away mostly and also sell.

      • ChinaImportal April 10, 2017 at 3:07 am #

        Hi Rob,

        If the product is design patented, you cannot import and sell them without a license from the patent holder

        • Rob Park April 12, 2017 at 11:16 pm #

          Hi Boris- Thanks for the info. My confusion is that there are mfg’s in China which claim they have their own patents to their bottles and then I find similar bottles patented by BlenderBottle. I can clearly see the patents on the USPTO for BlenderBottle but if there are minor differences in the design I wonder if the design patent is still valid.

    14. Adam April 21, 2017 at 8:23 am #

      Great post indeed! Really appreciate your sharing. Thanks! Waiting for your new posts!

    15. Agata May 23, 2017 at 8:14 am #

      Nice to read this! Still, there are some best china manufacturers one can choose from.

    16. Mark Ramona October 18, 2017 at 4:13 pm #

      The process of private labelling is a complicated maze when dealing with China – a process that is complicated by different languages, time zones and quality expectations. We have hired staff that speak the language and try to set up long term relationships so the initial steps in setting up the relationships don’t have to repeated. This article offers some ways to speed up the process which is good. But expect problems, delays and frustrations. In the end it usually works out. So far we have had only one relationship that has completely failed.

    17. Seema December 30, 2017 at 9:50 am #

      I am looking to start my own MAkeup line and thinking to get the products from Alibaba and have my own label on it. Don’t have any idea from where to begin as the articles are making me confused a lot. Any Help would be appreciated.

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