How to Promote Your Manufacturing Business

How to Promote Your Manufacturing Business 1

How to Promote Your Private Label Manufacturing Business Private label manufacturing gives any business the opportunity to have its own range of products, with its own brand name and label, for which customers must return exclusively to them to re-purchase. 2

How to Promote Your Private Label Manufacturing Business The Private Label Manufacturing Business Workshop is a one-day, threehour intensive online workshop that will give you the tools that you need to start your own private label manufacturing business. 3

How to Promote Your Private Label Manufacturing Business Our training workshops are designed to teach youth and adults life skills, self sufficiency and self-esteem enhancement skills. 4

How to Promote Your Private Label Manufacturing Business By attending this training, you will successfully devel into the world of private label manufacturing and explore perceptions, usage patterns and intentions as it navigates marketers and manufacturers alike through the complexities of understanding this increasingly popular market segment. A How - to- Start a Private Label Manufacturing Business emanual is included in the cost of the workshop. 5

How to Promote Your Private Label Manufacturing Business You see them every time you go to the grocery store. Private label products make up a large portion of items sold. Almost every grocery store sells its own label products. A company can make a lot of money doing nothing more than buying a product in bulk, putting it into smaller containers, and selling it under their own-brand name. Now, you can discover how to get your share of this lucrative market.. 6

How to Promote Your Private Label Manufacturing Business Part 1: Business Fundamental Introduction Who We Are? Introduction to Private Label Manufacturing How-to-Promote Your Business Start with Phone Calls Develop a Sales Route Look at the Profit Potential Begin with a Single Product Establish a Publicity Program Advertising Private Label Sales Finding a Partner Marketing 7

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How to Promote Your Private Label Manufacturing Business Although we do not know what type of product you may be interested in promoting nor do we know what kinds of customers you have in your immediate area, we can give you some general suggestions for promoting your business. Before you actually start in business, spend your spare time building up a list of prospective customers. If they are manufacturing plants, you'll need to gather the names of the purchasing agents, shipping room managers, production managers, or whatever other group of decision makers you will be required to contact. This can take time. But, as you build your list you can ask for referrals to other individuals employed in other plants nearby. 9

What is Private Labeling? First, let's be clear about what I mean by Private Labeling. According to Wikipedia, the online encyclopedia, private label products or services are typically those manufactured or provided by one company for offer under another company's brand. So this covers everything from Wal-Mart brand products to the small restaurant putting their label on someone else's hot sauce. It is amazing the number of businesses now that are engaged in some form of private labeling. Restaurants, hotels, spas, hair salons, even car dealers are all putting their own brands on products such as hot sauce, lotions, shampoos, coffee, lip balm, bottled water and wine. Many corporations want to put their own logos on products that they give away to reinforce their brands. The corporate gift market is particularly busy around Christmas. 10

Getting Started There are also many small businesses that want to appear more professional by having their own brands of products to sell - coffee and bottled water are especially popular here. So how do you get started in private labels? The easiest way is to just start selling to other local companies. If you sell coffee then start with the local cafés and donut shops - many companies are happy to support other local companies, particularly if they can get their own brand name on the products. Obviously, your existing customer base would also be a good place to start. Once you have a few private label customers you can then start a formal "Private Label Program" giving prospects examples of what other companies have done. One important point to note is be sure to make it as easy as possible for your customers. 11

You should offer to do all the work for them including the labeling, so they will just receive the finished product. You may end up having lower margins on your private label products, but you can make up for that with increased volume. Private Label Resources You don't have to do it alone in your private label venture; there are plenty of resources out there to help you. There are two main publications that you can read: Private Label Magazine Private Label Buyer Getting Started There is also a national organization - the Private Label Manufacturers Association that puts on a big trade show every year just for the private label industry. I would also expect your own industry trade association will be a useful resource for you, they may even have some information on private labeling. 12

Getting Started A simple search request for "private label" on Google brings up over 10,000,000 pages. Add your industry to that search and you will have a wealth of information more specific to your needs. For instance, the search "private label coffee" brings up over 13,000 pages. You should do this to see what your competitors are doing in your industry, which actually could give you many ideas. While you are online you should also look for blogs and news articles within your industry - there is a lot being written about private labeling. 13

Reaching the Next Level If you continue to do all the production work yourself there is obviously a limit to how large your private label business can be. If you want to reach the next level you will need to hire the services of what is known as a Contract Packager. Basically, these are companies that take your product and packaging and put it all together for you and then ship it to your customers. They can even mix your ingredients for you to create your end product. You need to be at a reasonably high volume for this to be worthwhile, but the beauty of outsourcing your production work is that it scales very easily - and it leaves you time to focus more on bringing in business. The Contract Packaging Association is the trade group for contract packagers and their web site has a wealth of information. You can read about the criteria you should use when choosing a contract packager. They can even help you find a contract packager in your area with the capabilities that you need. 14

The Potential We have seen it many times when a small business will start out small ordering their own brand of product. Then they will start private labeling with a few of their key customers. The next thing you know they are sending us dozens of different labels for a large number of customers as they expand their private label business. I know it may be just a dream for many of you to have your products as the store brand at a national chain, but if you don't start out down the private label road you may never know the potential for your product. If you are completely focused on selling your products under your own brand at wholesale or in a retail store you may be missing out on a huge growth opportunity. The private label trend shows no signs of slowing down - you could very well find that the sky is the limit. 15

Start With Phone Calls, First! If your sales calls will be made only to maintenance superintendents, a simple telephone call can be made during business hours to obtain that person's name and correct title. At the same time, you can confirm the correct mailing address and telephone number and extension. In this manner you can build up your very first mailing list. This foundational work can be completed before you actually print your first sheet of business letterhead, catalog page, or price list. Complete it long before you actually have picked out your company name, your product name, or even before you have repackaged the product you will sell. 16

Start With Phone Calls, First! You may want to review local telephone directories and business directories to assist you in compiling names for your initial contacts. If you will offer your products in communities outside the city in which you live, you will want to compile a similar list of prospects in those other communities. 17

Develop a Sales Route In some cases you may want to consider establishing a weekly sales route of some type. One week in towns south of your city, the second week in towns north of your city, and so on. Leave one week free out of every four or five to take care of local or emergency deliveries. If your prospects will consist only of manufacturing plants, it would be wise to make friends with a truck driver who delivers to most of the plants located in your immediate area. He could give you valuable information regarding the people to contact in a given plant. 18

Develop a Product Label During this initial market research time you should be making yourself aware of how the competition actually labels their products. This will help you in creating the design for your own label. You may want to employ the services of a commercial artist to help you design your product label. If you are going to offer your product in two or three different sizes, the design must be created in a manner that permits you to have it reduced to smaller sizes without losing its special identity. Give it careful consideration and you can come up with a very striking design that can be reproduced on your company letterhead and advertising material. 19

Develop a Product Label In some cases, a very plain label works best. Here's a good example. In the Los Angeles area some time ago, an enterprising distributor offered a garden hose in 25-and 50-foot lengths. The hose did not appear to be much different from those offered by competitors. Because the marketer was a distributor and not a manufacturer, it was obvious that his brand name and printed tag were the only thing different from the competition. The distributor hit upon an idea. He had his labels printed in very large letters with the words "BRAND X". Since many manufacturers make all kinds of claims that their products are better than Brand X, potential customers immediately recognized the name of our friend's product. All he did was capture the imagination by offering a product with that name. 20

Look at the Profit Potential Your repackaging operation is something that can be done in a basement or garage. You will not have to rent some special facility. Repackaging can be done in the evenings or on weekends. It is an excellent way to start part-time in business. You will never have to repackage more products than you need to make deliveries or shipments the next day. You will not have to consider owning any special inventory. You can build your inventory in direct relation to the way you build your business and the demand for your product. Because the gross profit will vary greatly from one product to the next, we cannot give you any exact figures here. But in most cases you should be able to more than double your money by buying in bulk and repackaging. That means you will be working with a full 100% markup. 22

Look at the Profit Potential Usually you will charge more for your product when you divide it into smaller containers. If you offer paint in pint and gallon sizes, for example, obviously the pints will cost the customer more per gallon than the gallon size. When you can operate a business with a low overhead, everything you make can be put back into the business for growth. You take out only the amount of money you need for yourself until you have built up a working inventory. Once that has been accomplished, you could take out everything in excess as compensation for yourself. 23

Begin With a Single Product If you begin with only a single product, it would be best to use your profits to help you start up additional products related to your first offering. For example, if your first offering were a floor cleaning compound, your second product line might be floor waxes. A third product line might be a good wax stripping compound or a window cleaning liquid. These decisions can be made after you establish yourself and begin to uncover the selling opportunities in your area. Let's take a look down the road at your ultimate potential for making money. When you establish yourself in business and build up a customer following, you have something that is worth money to others. You have a going business. As such, it can be sold as an investment to someone else who has money but does not care to take the time to build a business from ground zero. 24

Begin With a Single Product If you were able to build your business up to a point where it generated a steady monthly cash flow of say $5,000, you have a business that will generate approximately $60,000 a year. A business that can generate that type of annual gross might be sold for several times that amount. In other words, you might get $100,000 or more for your going business! The purchase price of a business is typically based on a number of factors. These include the ability to generate a steady cash flow, the customer list itself, and any inventory on hand. You can get back everything you put into your business, plus the multiplying factor for your ability to generate a steady flow of money every month.. 25

Begin With a Single Product Because you are in business for yourself you will have certain tax advantages. These benefits change from year to year under various Internal Revenue rulings. However, there are real advantages to you in potential tax savings. Until you learn more about this, you need do only one thing. Keep accurate records of all your expenses. Virtually all of them will be legitimate business expenses. As such, they are tax deductible. When you have to go to another city to check on a possible new source for a product, your trip will be a business expense. If you use your automobile to make deliveries or sales calls, that portion of auto use will also be a business expense.. 27

Establish a Publicity Program Once you have established yourself in business you should consider doing whatever it takes to make you, your company, and your product name well known. A good promotional plan calls for conducting your own publicity program. Mailing out news releases to local newspapers, magazines, and business publications should be something that you do on a regular basis. Almost every small business community has some kind of group meeting. Consider becoming a member of one or more of these groups. The contacts you make here can be extremely valuable to you. Join your local Chamber of Commerce when the time is right. Membership in most civic organizations can also help introduce you to business people in your community. 28

Establish a Publicity Program Don't overlook your own bank as the way to meet new prospective customers. All banks have at least one executive who is in charge of business accounts. Your banker knows hundreds of business people in your area on a first name basis. Use him as a source for developing new contacts. A simple printed announcement placed on bulletin boards in local supply houses, supermarkets, and other public locations should be considered whenever you need to announce a change to your product line. Make it a point to do a certain amount of business promotion every day of every week. Make telephone calls, do some direct mailing, make a certain number of personal calls and always be on the lookout for ways to build up your prospect list. 29

Establish a Publicity Program Satisfied customers can be another excellent way for you to build your business. Your customers will be more than glad to refer you to others, provided you have a good product and give good service. 30

Advertising All the things we mentioned up to this point will not cost you a thing, except for membership in a local organization. Actually, you do not have to spend money on that until you are ready. Once you have established yourself and can afford it, you should consider spending a certain amount of money on advertising. This may not have to consist of anything more than an advertisement in a local telephone directory or a series of small classified advertisements in local publications. For most products, it will be virtually impossible to sell directly from an ad itself. You will use advertising to generate requests for more information. Then you will follow up by mailing a sales flyer, a personal letter, and a price list. In some cases you may want to hand-deliver the follow-up message. 31

Advertising Advertising costs money, so spend that money wisely. Be sure to test one advertisement against another until you learn which words are best to use in your ads. Do not make long term advertising commitments until you have learned what works best for you. High volume targeted mailings can be quite expensive. You should not use this form of advertising when you first start out in business. Your best mailing results will come from the customer and prospect lists you have built yourself. In this case, your mailing will be directed to a specific name and title that you have predetermined will be more responsive to your offer. 32

Advertising Look for ways to get your sales message distributed in a cooperative situation. Perhaps the supplier who sells you your containers, shipping labels, or other supplies will cooperate with you by putting your messages into their outgoing orders. This will be a free form of advertising distribution for you. Your only cost will be for printing the sales circulars. In most communities there are shows, conventions, fairs, and special exhibits throughout the year. You do not have to rent an entire booth for yourself until you have found this to be an excellent way to get new customers. Experiment first by sharing space with someone else. It is always better when two companies can share a small booth. Look for this opportunity in your area. There may be two, three, or more small retailers who would be more than glad to cooperate. 33

Advertising Do not overlook the fact that many people do not like to think they are pioneering a new product. When you can do some name dropping, it will help immediately to assure your prospect he is not testing a totally new product. Tell him who else has been using your product on a regular basis. If necessary, type out a list of previous users and make copies for interested customers. Do not print and reproduce a testimonial of any kind, however, without written permission to do so. If technical facts about the product will help you sell it, go back to your original manufacturer. In most cases he can give you official testing results and technical information you can use in developing your sales message. 34

Advertising Don't forget that all products are harmful if used improperly. If a product is harmful to a certain kind of paint or surface, be sure you know those limitations in advance. Do not hide that fact from your customers. Cleaning compounds can, in some cases, be harmful to the skin. Make sure you have suitable warning instructions to give to every customer. Some products produce harmful fumes and odors. Make sure these fumes will not present a problem to some of your customers. Be truthful in the claims you make. If by any chance you see your customer might use the product in the wrong way, do your best to discourage him from it. One dissatisfied customer can kill many additional sales for you over a long period of time. It isn't worth it. 35

Advertising You can build a profitable business of your own with your own private label products. There are thousands of potential products you can repackage and distribute under your own brand name. If you build your business slowly and carefully, you can develop a winning operation. It can be done. Other have done it before you. There is no reason you cannot do it, too! 36