Buying Private Label Products in China: A Complete Guide

Suggestion: Watch the 10 minutes video tutorial before reading this article

Importing private label products from Chinese manufacturers is often seen as a faster and easier way to launch new products. This is sometimes true, but only if done correctly. In this guide, I share everything I have learnt about manufacturing private label products in China – including which products are better suited for private labeling, specifications, making design changes, quality control, compliance, and much more.

This is covered

• What is private labeling?
• Product categories suited for private labeling
• Product categories not suited for private labeling
• Creating a private label product specification
• Making design changes to private label products
• Logo and labeling costs
• Logo and printing specifications
• Product packaging
• Quality inspections for private label products
• Private labeling products and safety standards
• Questions & Answers

What is private labeling?

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

Other key criteria are that private label products are made using existing tooling, such as injection molds.

Examples of private label products

• Stainless steel moka pot with engraved logo
• Android tablet with printed logo
• Bluetooth speakers with printed logo
• Jewelry gift box with printed logo

The benefit of private labeling is that you can create a branded product, without investing too much time and money in product development and tooling. Hence, you can launch a product much faster, and at a lower cost.

This makes sense if you intend to launch a ‘generic’ product that’s already on the market in some form. That said, you cannot make design changes to a private label product, which also makes it harder to break into an increasingly competitive e-commerce marketplace.

Advantages

+ No mold or tooling costs

+ Faster sample production time

+ Makes sense for generic products

+ You can normally change materials and colors

Disadvantages

– You may end up selling the same product as many other companies already do

– You cannot make changes to the design or dimensions

Product categories suited for private labeling

Molded metal and plastic products are generally better suited for private labeling. There is less margin for error when the product’s design, functionality, and quality are already part of existing tooling. That said, private labeling is more common in certain industries where suppliers are more used to ‘creating’ their own catalog of standard products.

• Watches
• Accessories
• Electronics
• Kitchen utensils
• Furniture
• Medical devices

That being said, it’s still necessary to create a complementary product specification when buying private label products in any of the mentioned product categories. There are often options in terms of materials and components. It’s always best to avoid letting your supplier decide that for you.

Product categories not suited for private labeling

Private labeling is hard to apply to products that are not made using pre-existing tooling or standardized parts. For example, private labeling is not really a thing in the clothing industry as the manufacturing process is depending on cutting and sewing.

In a perfect world, textiles manufacturers would have a set of standardized techpacks. However, this is not the case, which is why there is too much of an error margin without a clear product specification for private label clothing to work in practice.

Creating a private label product specification

It’s still necessary to create a product specification when importing private label products. The difference is that you create the specification largely based on the ‘existing’ private label product, rather than creating a product from the specification.

In practice, this often means that you’ll need to buy product samples and then document the following:

• Product design (e.g. take product photos or create design drawings)
• Bill of materials (by listing the different materials)

Then you must also include the elements you intend to customize:

• Logo
• Artwork
• Colors
• Packaging
• Standards

In a way, it’s a bit like reverse-engineering the product. That said, it’s essential to “lock down” the product’s design, quality, and materials before you enter production. The supplier is more likely to make mistakes or even attempt to cut corners without the private label product specification serving as a clear reference point.

Keep in mind that suppliers often have multiple material options available even for private label products. You must discuss this with the supplier as you create the specification.

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.

Logo and labeling 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.

Logo and 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 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 money when something goes wrong.

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 to RGB colors or other digital color systems.

3. Print Position

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

4. Artwork

The artwork must be based on 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 cannot 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.

Product packaging

Most suppliers can offer a selection of standard packaging designs, that can be branded with the customer’s 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 finding out which packaging a supplier can offer?

First, they rarely keep product catalogs, from which you can choose. 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 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, private label packaging is faster and cheaper to get on the shelves.

Quality inspections for private label products

We often get asked whether quality inspections are necessary when buying private label products, as compared to custom-designed products. My experience tells me that private label products are in no way less prone to quality issues than customized products. As such, pre-shipment quality inspections – as part of a broader quality assurance process – are crucial.

In the end, you cannot return defective products to the supplier in China, so make sure that your products are inspected prior to shipment.

You must also provide product information to your quality inspection agency before the inspection takes place, including the following:

• Product images
• Dimensions
• Logo
• Colors
• Materials

This is one more reason why a complimentary product specification is so important, even when you buy a factory-designed product.

Private labeling products and safety standards

Private labeling products are not exempt from product regulations, safety standards, labeling, and documentation requirements. Nor does the fact that you import private label products somehow make you less responsible for safety and compliance. Yet, many importers make the assumption that this is the case.

As such, make sure you research the following before placing an order:

• Product regulations
• Safety standards
• Chemical and heavy metals regulations
• Product labeling requirements
• Packaging labeling requirements
• Lab testing requirements
• Documentation requirements
• Certification requirements
• Pre-import approvals/permits

Questions & Answers

Is it possible to import private label products from suppliers in Vietnam or India?

Private label products are as a concept quite alien to many manufacturers outside of China. My theory is that manufacturers in Vietnam and India are often more large scale and are simply not accustomed to customers asking them for “their products”. Private labeling has grown more popular as a result of Alibaba.com, and some Chinese manufacturers have also adapted to this trend by offering a range of private label products.

What is the difference between private label and off-shelf products?

Private label products are based on existing molds and tooling. However, such products are not necessarily mass-produced on a frequent basis or kept on the shelf by manufacturers.

Private label products normally only exist as a product listing on Alibaba.com, and will only enter production once a supplier receives an order from a customer.

What is the MOQ when importing private label products?

The minimum order quantity (MOQ) requirement is generally the same when buying private label products as when you buy a custom-designed product.

The MOQ is normally decided by the material suppliers, rather than the design type. The fact that you can use an existing mold doesn’t have any impact on the MOQ requirement in any meaningful way.

How do I find private label manufacturers?

You find private labeling manufacturers wherever you find factories of all sorts. As such, you can find them on Alibaba.com, Globalsources.com or at major trade shows such as the Canton Fair in Guangzhou.

Keep in mind that manufacturers rarely even use the term private labeling, as they don’t see themselves as such. From the factory perspective, it’s only a matter of whether you use existing tooling, or request a new mold to be produced.

How do I know if a supplier offers private labeling products?

Private labeling was not invented in China. It has existed for decades in the food industry, for example. That said, Chinese manufacturers have widened the range of items available for private labeling.

Our customers often ask us whether Chinese manufacturers ‘allow’ their products to be privately labeled, and the answer is almost always yes. There are very few suppliers that offer ODM products – but deny buyer branding.

Chinese suppliers are in general very flexible, as they make products according to buyer specifications. The positive aspect of this is that you can essentially get any product out there private-labeled, as long as existing tooling is in place.

Is it easier or faster to import private label products?

Let’s look into what it actually takes to go down the private label path. 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 sort of 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 product’. This can be far more time-consuming than hiring a product design freelancer and pay for custom-designed product samples from the very start.

The problem is that the supplier still expects you to provide them with a ‘complementary’ product specification, even when buying a private label product.

If not, they’ll “fill in the gaps” for you, in a way that benefits them – meaning that they’ll use the cheapest materials and components available, to improve their own, meager, profit margin.

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

This is what you should ask your supplier before buying a private label product

1. Do you have design drawings or CAD files?

2. Do you have a bill of materials (BoM)?

3. Do you have an overview of material options?

4. Do you have lab test reports?

5. Do you own the molds and tooling for this product?

Why is it often difficult to buy private label products?

Manufacturers in China and other Asian countries are rarely specialized as private labeling 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 design drawings, material specifications, reference samples, applicable safety standards, and labeling 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

How private labeling is supposed to work:

1. The buyer browses through catalogs and websites, picking out the products they want

2. The buyer sends a logo file to the supplier, and they work out the rest

3. 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

How private labeling tends to work in practice:

1. The suppliers most often do not have a ‘fixed’ product specification (e.g. design drawings and material specifications)

They still expect the buyer to provide explicit requirements for labeling, materials, design, and product compliance requirements.

2. Most suppliers don’t develop their own products or even tooling

Supplier websites and product catalogs can be deceiving

Browsing suppliers pages on Alibaba.com or at trade shows can give the impression that factories develop large product ranges, ready for anyone to order. 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).

As mentioned, a product catalog is not much more than a reference point for 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.

Further, even if they have the tooling, such as injection molds, they may (and should not) allow other buyers to use it given that someone else likely paid for it. I’m sure you would not be happy if your supplier allowed other importers to your injection molds or other tooling.