How to Start Private Label Dropshipping on a Budget?

Private label dropshipping allows you to create a brand by placing your label on products made by third-party manufacturers. It has become a trending choice for dropshippers who don't want to directly get involved in the production but are still looking for market differentiation. This article will walk you through how to start a successful private label dropshipping business on a low budget.

Determine Your Private Label Strategy

You need to choose a suitable label solution first. Different solutions come with varying costs, operating complexities, and market positioning. Below are three low-cost options commonly applied in the business for you to consider based on your target market and budget.

· Design the packaging with your label on it

This is the most direct and cost-effective approach. Design the packaging that aligns with your band style, such as boxes, bags, or bottles, and then place your label on it. You don't need to change a thing about the product —— Branding is accomplished simply by changing the packaging.

Platforms like Canva and Crello offer abundant free templates for you to create the ideal packaging easily. In this way, you get to quickly establish your own brand image at a fairly low cost.

Switching the packaging and adding your label helps with quick branding and suits different market needs while you adjust specific designs. The production cycle is relatively short, allowing you to get into the market fast. Besides, in markets with a wide variety of products and strong brand recognition among consumers, well-designed packaging can significantly increase consumers' attention to your brand.

Practically speaking, you need to address the extra packaging production and packing problem. It's best that the manufacturer that produces products for you can also offer the packaging service——They either produce or source the packaging and handle the whole packing thing. However, if unfortunately, you have to find a packaging manufacturer and have your products packed on your own, you're advised to find a packaging manufacturer nearby the one that produces products for you (within 2 days of transportation time between the two locations), transport the packages to the product manufacturer and have the products packed there. Your request will be gladly accepted if the packaging is not complicated or the order volume is considerable.

· Print Your Brand Label on the Product

Unlike what we discussed above, it means printing your label directly on products, like T-shirts, electronic accessories, and phone cases. It increases exposure as customers see your label each time they use your product, which strengthens their subconscious brand recognition. Also, directly printing labels on products usually costs less than managing your own packaging, it's much more beginner-friendly.

For most of the products you might include in your store, particularly clothing, phone accessories, and home goods, Chinese factories have developed mature label printing service, which means low costs, high quality, and fast delivery.

· Include Brand Promotional Cards or Booklets

It works for all types of products. You can add a brief brand promotional card or booklet inside the packaging to introduce your brand story or have them as user guidance, even offer coupons or discount codes. It effectively improves customer branding recognition and loyalty, potentially increasing the repurchasing rates.

This may sound attractive, but keep in mind, that you'll need to have your own card or booklet design, as well as match yourself with a factory that meets your personalized requirements. Generally speaking, compared to the two methods mentioned above, this demands higher procurement (or a stronger supply chain) and production capabilities, and the cost is also higher.

But these efforts are a necessary part of the branding if you're looking for scale development. The brand tone and the level of design sophistication reflected in it will directly influence customers' impression of your brand. Almost all big fine brands have their own brand promotion cards or booklets, they even have their tags customized.

Search for the Right Manufacturer

Once you're done with the label design, you're supposed to find yourself a manufacturer with a low minimum order quantity (MOQ) that suits you, satisfies your customization requirements, and ensures product quality and delivery time that is at least on par with the market average. Scaled brands generally have their own supply chain systems and rather keep the specific details confidential. When you just step into the whole thing, in most cases, you'll need to do the searching on your own. Below are the three popular ways to do so.

· Use the online platforms

This may be the most convenient and effective way to locate a suitable manufacturer. Platforms like Alibaba, AliExpress, and Made-in-China gather abundant manufacturers with transparent pricing, diversified product categories, and low-budget requirements.

Also, refer to the customer reviews and platform level for a better understanding and further, a more rational comparison of different options. Specifically, it's best to choose the one that provides one-stop services, like packaging designing, label printing, and logistics delivery, which keeps you from coordinating between different manufacturers and thus significantly reduces the cost. 

· Attend Trade Shows

Talking to manufacturers face to face helps you learn about their production capabilities, quality control, and level of services straightforwardly. In China, large trade shows like the Canton Fair and the China International Import Expo gather up different kinds of manufacturers.

You can not only filter out potential partners quickly but also compare multiple suppliers on the spot. During the communication, prioritize the evaluation of their pricing, production cycle, and whether they could meet your customization needs.

· Google Search

If you are not available to attend the trade shows, then Google search proves to be an effective alternative. By searching relevant industry keywords, you are exposed to a huge amount of manufacturers' websites or contact information. It functions even better when you have specific needs. When choosing from different manufacturers, don't forget to verify their credentials and customer reviews.

Evaluate manufacturers

So, what specific dimensions should you take when evaluating manufacturers after you've narrowed down the options and are about to conduct the final round of comparison? I've listed a few of the most important ones.

· Quality Control

Quality control remains the key factor to keeping your brand from a negative reputation. When consumers check product reviews, the ones regarding product quality, performance, and durability are particularly paid attention to. Also, it's found that on e-commerce platforms like Amazon, about 30%-40% of the negative reviews have something directly to do with product quality.

Please ensure the manufacturer can provide products that meet the quality standards of your target market. You should ask for quality certifications (like ISO and CE certification). Sample inspection is highly recommended, which allows the in-person inspection of the product quality and reveals the production level of the manufacturer. In general, after you make your order requests clear, the manufacturer will process the order, source (if needed), produce, and have the sample shipped in order. If the process takes too long, even if there's nothing wrong with the product quality, you should think twice.

· Private Label Services

When it comes to the service coverage of numerous manufacturers, the difference can be huge. Some may only provide basic brand printing while others are open to full customization options. Furthermore, among the manufacturers providing comprehensive customization services, the degree of fulfillment of specific requirements and the MOQ threshold vary. Don't mind checking every single detail beforehand, or else more troubles will find you during the order fulfillment.

· Communication Efficiency

Smooth communication is the prerequisite to good partnerships. Questions like these should be sorted out: Does the manufacturer accept phone calls and e-mails? Are the responses timely? Is there a lack of language fluency? Is the attitude sincere and friendly? You're pretty likely to be in a different time zone from your selected manufacturer. There lies the potential risk of slowed communication efficiency already, so don't let it get worse.

Critical Contract Clauses You Might Overlook

· Quality Issue Responsibility

Make the questions below clear: If the quality issues occur, will the manufacturer be responsible for returns and exchanges? If yes, how is a quality issue defined? Is there a quality warranty period? If yes, how long is it? Does the manufacturer cover the shipping costs? How long does it take to ship out replacement items?"

· Intellectual Property Protection

The contract should include clauses that prevent the manufacturer from selling products using your design or leaking your branding designs to a third party without your permission. Also, specify what compensation is required if the supplier fails to do so.

· Dispute Resolution

Conflicts are inevitable during order fulfillment. Most of the time, they can be resolved through your private negotiation. However, if they have reached an unexpected level, it's necessary to introduce a third-party mediation mechanism. You should agree on the specific aspects of third-party mediation, including agreeing to accept third-party mediation when communication between both parties fails, and which specific third-party mediation to accept. This can effectively reduce the odds of taking legal action.

Private Label Products from China

Conclusion

Starting a private label dropshipping business on a budget is certainly possible. By choosing the right branding strategy and finding reliable manufacturers, you can quickly get your brand off the ground. If you need further private label product supplies, PBFfulfill is ready to offer satisfactory sourcing and shipping solutions.