Marketing without a Marketing Organization
Private Labeling is marketing without a marketing organization. Manufacturers may pursue sales volume by manufacturing products for customer companies with the name of that customer on the product. Usually the customer company has a well established sales and marketing organization that has created recognition and acceptance in a market. It is much easier to private label and gain access to a market than it is to build a sales and marketing organization to serve a specific market and then fund the effort to gain recognition and acceptance.
Private labeling is just one option of several for people with new products and limited time, money and desire to do what is necessary to build a brand. Other options include an outright sale of your product idea to a company already well established in the market your product is intended to serve. While this may result in a financial gain, it will be a one time gain and all rights to the product will go to the buyer.
Licensing is another option for those with limited resources. Most licensing agreements acquire the rights to manufacture and sell a product that belongs to the licensor. The licensee gains these rights by paying the licensor a royalty that usually ranges between 3% and 10% on the wholesale price of the product.
Private labeling and licensing both offer the inventor marketing without a marketing organization. As with any of these options, it is advisable to work with someone who has been down this road as there are many ways to structure one of these arrangements to protect the interests of the person with the product idea.