In the first part of this three-part series, we took a look at the growing trend of direct to consumer and private label retail — this time we’ll discuss how to lay the foundation for a strong business based around these opportunities.
D2C and private label sales are forecast to become even more dominant in the retail market, so it’s a prime time for businesses using this approach with Shopify.
However, private label and direct to consumer sales have their own set of challenges and factors to consider:
Developing a strong position for your private label products is vital since your products will likely have (or will have in the future) competitors that are remarkably similar to what you have to offer.
There are numerous ways to position your private label products in the marketplace. This often involves targeting specific lifestyles, demographics or preferences:
Once you’ve established your product strategy, it will be vital to find ways to express those via branding.
While dropshipping can be a good strategy if you have a manufacturing or fulfillment partner who’s willing and able to handle it, keep in mind that, by definition, private label products can’t follow the more traditional dropshipping strategy of simply reselling mass produced products direct from the manufacturer.
That said, working with a manufacturer will be key for many private label stores, and often creates an opportunity to start with a “base” product that’s already being made and customize it to be unique to your store.
In these cases, you’ll also want to ensure that manufacturers agree that the specific formulation, configuration or packaging of your product is proprietary and can’t be sold to anyone else.
At the end of the day, it’s tough to create a truly unique product that no one else can mimic or outright replicate.
However, when products are carefully positioned and branded, you’re laying the groundwork for a more solid business that is both viable and profitable.
In the next installment of this three-part series, you’ll learn more about the importance of building a brand around your D2C store.
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