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Private Label Clothing Manufacturing - What is it? (The Benefits and Risks)

by Boris Hodakel  • December 11, 2019 • 5 min read

private label manufacturing

Private label clothing production gives retailers a chance to create their own brand without having to design a product from scratch. It offers the opportunity to grow as a business and allows for control over the look and style of the product; however it is not without risk.

By fully understanding the terms, processes, pitfalls and benefits you can better decide whether this is the route you wish to take.

Take a look at our short guide to private label clothing manufacturing and the benefits it could have in your business.

An introduction to private label fashion

So, as mentioned above private labelling involves the manufacture of products by a company, that are then sold by another under the seller’s brand name. These products are often generic style items that can be easily modified with brand logos and label tags.

During the manufacturing process, your brand labels are added, and the items become part of your company brand. Essentially this is how big business works, but they often own and control the production factories. In private labelling, you are hiring the services of another firm, who make and deliver the clothes to you.

Developing a brand gives you weight as a seller, and your name becomes known and associated with the design of your garments. It enables you to stand apart from non-branded goods and potentially means that you can have your individual designs bought to life.

Some retailers sell third-party lines and have their own range, which naturally increases potential sales as you are offering a wider variety and, not everyone likes to own big label clothing for various reasons.

A major player in private label apparel is Amazon. It alone sold 5 million items in apparel on Prime Day in July 2018 and appeared to use its discounts to push private label offerings. Analysts also predict is set to become the largest apparel retailer by 2019.

With insights on big players such as Amazon, quality private label clothing showcases that this manufacturing method is a viable option for businesses of all sizes.

What are the benefits of private labelling?

private label manufacturing 2

There are quite a few benefits of private labelling, which is of course why the appeal is there. A labelled item will always sell for more money than a generic non-labelled piece, even if your brand is not well known. If you retail third-party goods, you will find they are still quite expensive to purchase, even for wholesalers so when you sell on the mark up is marginalised.

With private label products, once you have paid the manufacturing costs, the shelf prices are for you to decide and you will find generally this is a more significant profit margin. Branding is a huge benefit, it gives you an identity and scope for growth. All brands had to start small, but the ones that end up at the top have often used private labelling methods in the early stages.

A generic retailer will not find the same growth potential. You can add new garments to the range, but because they fall under your brand, they have more kudos than adding non-branded items.

Are there any risks to private label garments?

The first risk to consider when looking at private labelling is the quality of the items being made on your behalf. You do not want to put your name to something that is frequently substandard, or that is of such poor quality it rips or tears.

To avoid this, you need to be sure you are working with someone who has a good reputation. Cheapest, of course, is not always the best. You need to look for reputation and testimonials.

Following on from this you want to have some guarantee of timescale, lead times and reliability before you commit. You do not want to work with someone who takes much longer than agreed to deliver or that disappears entirely. Again this is down to research to mitigate as much as possible.

garment factory quality control unit

When you brand an item, you take full responsibility for this. So if what you are selling is dangerous, substandard or otherwise faulty you are in the firing line. If you want to ensure liability sits with the manufacturer you need to have this signed in black and white before you even start.

Finally, you need to consider any legal obligations you have to fulfil. Trading rules, trademarks and patents are all complex worlds and not things you want to fall foul of. Even wording can be subject to copyright, and you need to take care when stepping on the toes of the bigger players. You have every right to trade, but if your items are too close for comfort, you could find they look to shut you down using legal loopholes.

Looking for private label manufacturers

With all that said, you might feel that the process of finding a private label manufacturer sounds daunting. However, it can be done, and the benefits are there to be utilised.

Firstly, start by finding a manufacturer with experience of your product. This might sound really obvious, but it matters. You want to see evidence they can make garments with correct sizing and to a high standard. Look for somewhere that offers a balance between high quality items and price , as you need to be able to mark up your products at a sensible profit margin.

With that in mind getting more than one manufacturer to quote for your work makes sense.

Be sure to discuss issues such as minimum order quantities , whether they offer any form of discount for bulk orders, what their shipping costs are and the problems above like timescales, liabilities and responsibilities.

Ask to see examples of quality and do some digging on the Internet, horror stories often get out, and you should be able to find positive reviews for suitable apparel manufacturers.

private label clothing maker

What you are looking for is a low defect rate, the odd issue will occur but do they offer any form of quality control or just label and ship, in which case you might need to check before the point of sale.

When it comes to shipping, you also need to check whether you have customs liabilities and where they ship too. Some offer door to door shipping others arrive at ports for collection.

To make the process easy, Sewport have an innovative filtering system that can help you find a private label manufacturer for your brand. Just sign up for an account and start reaching out to suitable producers based on your requirements. You can complete everything from initial enquiries through to orders, all on your personal dashboard. Sign up here and find a suitable private label clothing factory for your next project.

The next steps...

The bottom line is that private labelling offers a step up from reselling and gives you a chance to get your brand established. It has both benefits and pitfalls, and it is something that requires time and thought before commitment.

You need to do thorough research of all the issues mentioned and be sure that you have covered every risk. Mitigation, contingency and insurance might be your new best friends, but often the benefits do outweigh the risks so learn as much as you can, ask lots of questions and be sure to check the experiences of others when it comes to picking a manufacturer to work with.

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About the author:

Boris Hodakel is the founder and CEO of Sewport - an online marketplace connecting brands and manufacturers, former founder of various clothing manufacturing services. He is passionate about e-commerce, marketing and production digitisation. Connect with Boris on LinkedIn.