Private Labeling

The idea of private labeling solution and retail products is exciting and sometimes even more cost-effective for many of us. It helps us build our brands and our businesses.

And labels and logos are really fun to make. ( Janet+Dorothy what! )

JanetDiamondDorothy

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But the fun will cost you. Graphic design, marketing, a website, online checkout, labels, shipping costs…it’s a lot.

Private lableing is also another liability to you as a business. As soon as you put your label on something, it becomes your issue. So you have to be protected.

If you are thinking of private labeling, or already in the process, I suggest reading THIS first and consider the following steps to protect yourself and your existing business:

  1. Set the product line up under a different LLC andget another EIN. Some insurance companies require this in order to be eligible for insurance, but it is just a smart way to protect your existing business in case of litigation.
  2. Get insurance. Private label insurance is usually the same whether you develop the product from scratch or repackage and/or relabel existing product as your own. It is often cheaper to buy the product in bulk from the manufacturer and bottle yourself, but not always easier. Most insurance companies look at the product the same, so it’s something to think about.

Contact your existing business insurance provider and get a quote. With my business insurance, my agent first quoted me by categorizing my private label as soap making (which it is not and soapmaking is a special category aside from cosmetics that is much more strictly governed), so you have to careful of that.

Either way, expect to spend anywhere from $600-2000 a year on insurance if you private label.

If you are a licensed  esthetician, you can check out the ASCP for liability insurance for private labeling (it’s only up to $10000, but it’s a start).

Some other options for private label insurance are as follows (this is just a list I went through for quotes):

Alternative Balance

Independent Cosmetic Manufacturers and Distributors

Sadler Insurance

Marine Agency Insurance

Have you gotten quotes for private labeling? Were you surprised at the costs of private labeling? Waht did I miss in this article you wish you knew when embarking on private labeling products? (Also, show off your brands in the comments)-M

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