Dropshipping vs. Private Label

As you start your own business and enter the corporation world, there are many essential decisions in the process. One of them is how you will produce and fulfill your orders and make sure your customers get the product they purchased.

What is dropshipping?

Dropshipping is a type of order fulfillment method used by business worldwide to make sure the sold good are always in stock. In this way, the retailer, who sells directly to the final consumer, sources their products directly from the manufacturer, as the stock sells and more products are needed, without needing to pass through third parties.

Basically, instead of keeping a stock in the location of the retailer, the retailer solely acts as a seller, and the good goes directly from the manufacturer to the consumer. The consumer buys the product through the retailer, and companies like Niche Dropshipping will automate the process, sending the product directly to the consumer’s hands.

The consumer will place the order in your store at the retail price. Your store keeps the desired profit over the purchase, and forwards the order to the supplier, paying wholesale for the product. The supplier will ship the product directly to the hands of the consumer.

What is private label?

A private label corresponds to a manufacturer who creates customized products for third parties to sell under their brand. In other words, the manufacturer gives you the freedom to choose the formula, customization, or design of the product they manufacture for your brand. This personalized product will then be sold exclusively by this one retailer/re-seller who ordered the product. You get ease in production while being able to do small customizations in your packaging and formula.

Private label production is the best of both worlds. You get the ease of producing a “generic” product, with the option to make customizations and to make your product unique. In other words, the machinery for the production is already set, making it easier and faster to produce and giving also lower minimum order quantities while giving you the opportunity to personalize some aspects of the product.

Good for you, Wonnda is a platform that specializes in finding the perfect private label manufacturer for you and your brand, to make sure your final customer will get the highest quality product in their hands in no time.

The main differences

Pros and cons of dropshipping

For some smaller and less experienced, dropshipping makes more sense, as they have less work and it’s an easier process overall for the retailer.

With dropshipping, you get to start a brand with low investment and have a variety of products available for the consumer, while having less risks for yourself. On the other hand, you’ll have more competition and no product branding, as the goods go straight from the manufacturer to the consumer, and allow no customizations and modifications on your side.

Pros and cons of private label

If you are already a bit advanced and want to have more control over the production and distribution of the products, then private label might be the one for you. With private label, you can use branding and customize the product as you like, to make it more unique and differentiate from the competition, while also dictating the price that the product is being sold.

With the advantages of control over price, customizations and branding, private label tends to be more expensive than dropshipping, and demand a higher starting investment to start production. At the same time, you are also subject to more risks, as you need to meet the MOQs of the manufacturer.

Create your own product line with Wonnda – the European platform for white label, private label, and contract manufacturing

Are you interested in launching your own brand but don’t know how to get your production up and running? Whether you’re an aspiring startup entrepreneur with an innovative product idea or an existing retailer looking to diversify your assortment with your own products, launching your own brand through a private label or contract manufacturing could be just the step you need to take your business to the next level.

Here at wonnda, we work with top European producers for private labeling and contract manufacturing. The first step in getting your product to market is probably the most crucial – finding the right production partner for your project. The great advantage of wonnda.com is that you can let us do the heavy lifting. Just tell us quickly about your project or product idea. We will then approach the most suitable producers for your project and connect you with them. Sounds interesting? Then fill out the form!

Ready to launch your product?

We help brands and entrepreneurs to launch products with trusted European manufacturers

Related Articles

Claim 50% discount now

Join the Wonnda Sourcing School