These hair care products are sold by a third-party manufacturer or retailer under the brand name of the retailer. These products are commonly called Other Equipment Manufacturer (OEM) products because the manufacturer uses their own equipment, ingredients, and formulas which are necessary to make these products. The private label hair care products manufacturers in India are second most famous products manufacturer and take up to 25% of the total sales.
These products also help in boosting the margin of a retail store as well as new stores earn credibility from the customer’s trust. When it comes to private label, about 70% of the hair care products in the market are private label.
Categories into which cosmetic business is divided into
There are four categories into which cosmetic business is divided into. These are:-
- Color Cosmetics or Makeup
- Treatment or Skin Care
- Fragrance
- Health and Beauty Aids
Types of Hair Care Products Manufacturer
There are two types of hair care products manufacturer. These types depend on the number of products that are manufactured by them and the scale of these products. These are:-
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Private Label
These are those manufacturing companies where the number of private label hair care products are being manufactured and sold at a time is limited. Their products can easily blend with national brands. They have no fixed contract with the retailer and the retailer can stop having these manufacturers making their product at any time.
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Contract Filter
These are those manufacturing companies which produce large quantities of a single type of product. They have a lot of stores (chain store) where they are supplying their hair care products for selling purposes. These brands of hair care products come under the contract filter. They have a contract with the seller before the supplying is made. Even if the seller is facing losses in the selling of these products, he/she cannot stop selling these products until the contract is over without having to pay some compensation.
Read more related post: Why the market of Natural Cosmetics is flourishing?
Places where these products are normally sold
There are many places where these types of products are sold. In fact, almost all of the places where the hair care products are sold have some amount of private label products as well. Some of the places have these products for years and most of their profit in this field comes from these types of products. These places are:-
- Beauty Salon
- Boutiques
- Chain stores
- Companies where they sell a single brand of hair care products.
Advantages of selling Private Label Hair Care Products
When a new retailer or seller comes into hair care business at any place, it is very important for him or her to have a good amount of sales at the initial period. It becomes more important if he/she has taken a loan from a bank to start this shop since they also have to pay the debt they owe. In such peculiar situation, a private label product comes in very handy especially if these products are hair care products. Doing this gives a lot of advantages to the retailer. Some of them are:-
- The retailer has control over the quality of the product which they are selling. For a new retailer, this is important since he/she needs to sell the high-quality product to impress the customers they get which would bring them again to their shop and provides initial profit.
- Another advantage of an impressed customer is that they would tell their friends how good this new shop’s products are and in return, there would be more customers to the shop which give more profit.
- They have a constant flow of products coming and going out of the shop. It would be very helpful to them since the owner of the land on which he/she has opened the store comes to see how good the store is doing and how much profit the product owner is gaining from these products.
- Initial profit earned can help them expand their business.
- If the manufacturer is a contract filter manufacturer (they produce products in large quantities) then they have a supply of products for good period of time (until the contract expires) which would mean they don’t run out of products.
Disadvantages of doing this for a new retailer
There are a few disadvantages of doing this for a new retailer. Some of them are:-
- If the product causes any kind of issue to the user then the backlash of it would be faced by the retailer only and not the manufacturer.
- It takes a lot of time for a product or a chain of products to be manufactured varies a lot. This is because it depends on the formula which is used to make these products. This could make an issue for the retailer when they run out of products at the shop.
- The number of products that are given to a particular shop is limited even in case of a contract filter manufacturer. As the product supplied to various shops gains popularity in the area at which his/her shop is located he/she will run into a problem sooner or later.
There are lots of Private Label Hair Care Products Manufacturers in India who is controlling much of the business for a particular retailer since they are the supplier.