Have you been looking into starting an online business or your own business in general? Have you thought about something different than a blog?
Today, we’re going to discuss starting your own product label.
[Quick note from Martin: This is a guest post from Rob Campbell. He actually landed me a sponsorship for a mouth guard through a local wrestling company that I work with. He shared seven secrets to attracting sponsors a few months ago.]
Studenomics readers will know and be inspired by the wealth that can be created in a short period of time by starting an online business, especially one that can scale from a small home based business to large corporate enterprise (fairly) quickly and easily.
The root cause of making this happen is properly selecting what to sell online, and therein applying the 10x profit rule – if you buy locally for a dollar, you should try and sell globally for nine ninety-nine. Success usually follows in accordance with market demand, the efficacy of the website design, the user interface, and of course the digital advertising that propels online sales, or not.
Customer service, new market penetration and new product development follow naturally as the business expands to eventually dominate an entire product category; think of Burts Bees Lip Balm, which is something of a cautionary tale, but a useful example in this instance.
What should you sell online?
- The worst thing to sell online is your time as that doesn’t scale very well.
- The best thing to sell online is rare or highly niche Information as every pdf download is money in the bank.
The downside to the pdf is the low barrier to entry for competition, and the well-intentioned archivists who eventually make your data free.
The next best thing to making money online is probably unique packaged goods. Some might say that this begins with the product label design.
Creativity is Crucial to Make Product Labels that Own the Shelf.
Customizing your product labels by harnessing new printing technology can give your enterprise a real advantage over larger corporations where change is slow to manifest itself on store shelves. Label printing starts with good design, and new state-of-the-art printers like those at Lightning labels or InstaPrint can streamline the finishing and packing process.
Here in Toronto, Lorpon Labels packaging solutions includes new custom digital printing presses that offer packers ‘variable content printing’ which refers to a digital printing process that, in a single print run, can insert many different combinations of names, images, sports teams logos or other information to make deeper consumer connections. The main benefit to creating such custom theme inspired labels – the photo above show a whiskey label printed as part of a series made to resemble Napoleonic era currency – is that the products will suddenly have more value to shoppers because they’ll engage their minds in a more meaningful, fresh and intriguing way.
Insert your marketing genius here and make market share every time a satisfied customer shares your brilliance via their social network. This trend is proving to be increasingly popular among urban millennial consumers who seek out and purchase individuality in all product categories.
The 10x profit rule is harder to apply to packaged goods and getting exclusive distribution for premium merchandise is impossible unless you’re the packer. Dry goods, teas and spices, even untreated Canadian pine cones picked up off the ground while walking dogs in urban parks are good things to sell online. But there’s an ocean of competition in these categories as once again the barrier to entry is low.
If you’re buying tea in China (and shipping it here in bulk) for a dollar, and you hope to sell it online in Canada for nine ninety-nine, this author would expect a either a very large quantity of tea, or a very fine brew. Maybe you have a line on a ceremonial grade Matcha green tea powder?
Differentiation and a purpose are prerequisites for high competition niches.
For other would-be entrepreneurs scouring the web for ideas, this author believes buying liquids in bulk and bottling the fluids in accordance with federal and municipal guidelines is the best way to achieve the 10x variable without adverse competition and while maintaining relatively low overhead.
Sourcing legal sized and proper high quality containers is not hard anymore, and renting bottling facilities or equipment is possible in every market in North America.
Bottling liquids bought in bulk is almost always the best way forward for the frugal entrepreneur especially if you have some access to the necessary facilities. This author believes in the merits of glass bottles and modern recycling favours glass over plastic vessels, (however online shipping often favours plastic containers) but either way it all comes down to the strength of the label and the branding and the message and whether or not the combination of these three things will be enough to entreat the shopper to make a positive purchase decision.
Special testing equipment is required for would-be bottlers.
Unlike other dry goods product lines, buying liquids in bulk often requires special testing upon purchase. In most cases the buyer is equipped with portable lab equipment to test purity of the liquids to which their company may be legally obligated to warrant on forthcoming labels.
Lab-Equip in Toronto has food testing apparatus for co-packers and is a good place to begin research on product quality modifiers and indicators that could give your buyers an advantage over other bidders.
It’s a fact that small bottles sell the best, and also ship the best and that’s often where packers find the greatest return on investment.
The internet is full of boutique brand co-packers and several companies exist locally that have followed the rules and built large and very successful businesses.
The photo on the right shows a young highly entrepreneurial Ontario honey packer who buys premium single variety honey product direct from honey producers in forty-five gallon drums to repack in 365 ml glass jars – at that size, one 600lb barrel will make over 800 saleable units.
Unlike some other sectors, the agricultural products industry is very tightly regulated in Canada. Here in Ontario, honey can only be sold commercially in seven specific sizes of wide-mouth food jars. The sizes are 120ml, 250ml, 365ml, 500ml, 750ml, 1 litre and 2 litre sizes, as per the Canadian Food Inspection Agency honey packaging page on their website. This is done so the consumer has a better chance of doing comparison shopping in the marketplace.
Most packers in Canada obtain these jars from Salbro Bottles in Woodbridge Ontario which sells all the correct sizes in both round and hex jars and with either gold or white metal caps.
This young person in the photo above is also a commercial honey producer himself, but has grown a huge following in the Toronto Farmer’s Market Network circuit, which is an emerging and increasingly profitable commercial marketplace for organic or ‘all-natural’ agricultural product co-packers.
Honey packers must test the honey they buy from beekeepers for moisture before purchasing in bulk – many use a portable medical refractometer to insure the liquid is below 18% moisture (water content) which means it will not ferment in the jars. If the honey is particularly dry and has very low moisture, which can happen in drought years, the honey packer can make money by adding water to the liquid and bringing it back up to 17%. Modern honey packers are not mandated to pasteurize their product, but many do it anyway to prevent it from going crystalline in the glass jar and thereby greatly extending the natural product’s shelf life. Honey kept under 18% moisture will not spoil at room temperature, ever.
Did you consider getting an exclusive license as a co-packer?
A contract packer, or co-packer, is a company that manufactures and packages foods or similar products for their clients. To market and distribute, a co-packer works under contract with the hiring company to manufacture food as though the products were manufactured directly by the hiring company.
Sarafino Foods Inc in Uxbridge Ontario is a good example of a successful co-packer that’s slowly but surely carving out precious market share in Canadian fine foods stores with an exclusive license to distribute real olive oil (I use the word ‘real’ deliberately as much of the olive oil available in supermarkets today is not derived from olives).
Sarafino imports directly from a grower, who is a family member, in Italy. Over the years the firm has developed a sophisticated product line that now includes Balsamic vinegar, Swiss chocolate and other European origin gourmet delicacies. The family run business buys in bulk and re-bottles, or repacks the goods here in Ontario striving for a 10x return.
Their marketing, including their sophisticated website was done by Jib advertising agency in Toronto which conceived the idea of putting a ‘Sarafino’ itself, which is Italian (Latin) for angel, right into their brand logo.
Angelo credits the re-branding as he calls it, even though they had no real brand beforehand, with giving their company a presence in the stores.
“I can see the angel on the label the moment I walk in the door.”
The labels on the bottles are one clean, simple and compelling and this is one reason why the company e-store is thriving online and in gourmet food shops today.
Designing labels for bottles begins by knowing what’s inside the vessel and where its going to be sold.
Color, shape and even the font of the text are important ingredients in a winning brand combination.
Bottles filled with oil require a ‘film label material’ coating as oils dripping down the side of the bottle will quickly contaminate any paper surface, leading to an oil soaked label and a poor image for the brand. Essential oils deriving from distilling aromatic plants require specially laminated labels as even a few drops of the contents will disintegrate the surface of most packaging.
PEC Lavenders also here in Ontario which does a healthy online trade in Lavender essential oils credits the evolution of their heavily laminated labels as a mark of professionalism in their trade. Products with waxy finishes are sometimes prepared that way to better survive the rigors of shipping. Kaia Naturals evolved more durable finishes on their charcoal deodorant line when they started getting units returned from stores with scratched or scuffed labels. It forced the company to rethink how they pack their boxes and the durability of the paper label on the plastic vessels.
Do you think you could get wealthy repacking commodities with a recognizable private label?
Successful co-packers realize, when they’re at the top of the food chain looking back on their successes, that what they’re really packaging is their own passion for their products.
“Business opportunities are like buses, there’s always another one coming.” — Richard Branson