Understanding the global supply chain is vital to your business in terms of manufacturing a private label product. The first element of being able to accurately monitor and control this vision of development in the early phases of your business is by aggregating data into manageable data sets with data interpretation systems and algorithms. This will ultimately allow you map out and monitor the supply chain system that your business is operating on and allow you to assess where you can make changes, how you can maximize efficiency and ultimately how to save money whilst not sacrificing on the reliability of your business as a key factor in the chain of supply. By employing a system of data tracking and analyses, you will also be able to monitor your supply chain and therefore be able to make changes in terms of the suppliers you use, the logistics involved with supplying wholesalers with your product as well as open up possible avenues of revenue or other wholesalers who are available to you or have a desire for your private label product.
Logistics is something that many people tend to overlook as being an essential part of their business when they’ve just started a private label enterprise and generally tend to focus more on the physical costs involved with the manufacturing process of the product line as well as the marketing strategy for their label. Although it may be true that having a good marketing strategy, and being able to identify and target the consumers and wholesalers who may be interested in buying or stocking your private label product is an essential part of running a business, mapping out your supply chain and logistics is just as important and can be seen as the most influential part of ‘back office’ administration that any business should consider. Let’s say that you have set up an agreement with a wholesaler and they agree to stock or sell a certain amount of your product on a monthly basis. Well done – you’ve achieved the first step as a private label manufacturer and have set-up a client. This is good as it will be a source of revenue for your business and can allow you to expand on your product line, or increase production – even better the manufacturing process. However, not fracturing in the logistics of getting the product to the wholesaler – if they do not agree to deliver the product themselves can seriously cut into your projected profit margin.
If you thought you were making x before setting up a suitable chain of supply or logistical operation, you can immediately deduct 25% off the top of your projected profit margin on any particular deal. Not to mention having to factor in breakages or damaged goods – which will usually take off another 30% of the money you could be making from that deal. So it’s important to have a reliable supply chain set-up before starting any deals with wholesalers or bulk-buyers , or you could wind up losing out.