In today’s world of manufacturing there are many words used to describe the process by which one company produces a product or service that is then marketed and sold under the name of another company. You’d be surprised by the number of your favorite brands that are actually manufactured by a totally different company.
Every few days I stumble upon an article about Trader Joe’s or Costco or some other fan favorite company. These articles always aim to dispel or unmask the truth behind who actually manufacturers those companies’ super popular products (hint: rarely is it the company themselves!) These companies and many, many more well known brands take advantage of White Label, Private Label or OEM Manufacturing to help fill their shelves and delight their customers. But what do all these terms mean and how are they different?
Let’s take a look at the most common terms for this production scheme and what makes each term different. Please note – the following is a look at how WE define these terms. You may find different applications or definitions especially within non-furniture industries.
Every piece of furniture we produce is “White Labeled.” All that means is that we do not affix any label or identifying marks to the items we produce. When you lift our cushions you will not see a deck label saying “Made by Barnes Custom Upholstery” nor will your furniture arrive in a box with our name, address, etc. on the side. Our reasoning for doing this is two fold:
Your Name, Your Brand
Private Labeling allows interior designers to affix their own label to our furniture and present our manufactured items as their own brand. After all, most of our designers recreate our designs with custom dimensions, fabrics or other design elements to create a one of a kind piece of furniture – the end product is THEIR design so it deserves to carry their name if they so choose!
Prevent Comp Shopping
We understand the #1 assault on interior designers today is comp shopping. Designers spend countless hours putting together a design plan, sourcing and planning furnishings and finishes and construction. And many times their clients go behind their backs and try to source the spec’d items for a lower price! NOT FAIR! At Barnes we have no desire to sell to your clients directly – we only want to sell to you, the professional designer! We want to be your partner, not your competitor!
Under White Labeling we create the initial design with our own names, SKUs, etc., how it is manufactured, the materials and processes used, and we market the product with our own names, SKUs, etc. But we are only marketing to interior design professionals.
We use the term “White Labeling” to refer to our everyday, single piece orders typically for use in a single installation or project.
Private Labeling is the process of affixing a 3rd party’s branding to a company’s product. For example, let’s say you run Susie Lou’s House of Seating. Instead of designing a new line of furniture – trying to figure out dimensions and construction, etc. – you decide to use some of our best selling designs to sell under your own label. Say you take our best-selling Savannah Chair, you can rename it “The Susie” and market it to your clients with your logo and branding.
From a consumer’s standpoint – it seems as if you manufacture this chair yourself. There is nothing on the chair that says Barnes (nor any other brand) – everything they see is 100% Susie, 100% of the time. This is Private Labeling.
When your local grocery store buys fruit flavored, ring-shaped cereal from the big manufacturer and renames them the Loopie Fruits, that is Private Label. Your local grocery store does not own the recipe nor the manufacturing -they are simply putting their brand and product name on another company’s product. Unlike White Labeling, you plan to sell this item more than once and you’ve spent time and resources to name, brand and market this product as your own which then makes it Private Labeling.
If a new company or designer does not have a super unique design perspective it is often more successful to start by offering a few Private Label designs before launching a brand new, OEM product.
Under Private Labeling we have nothing to do with the sales and marketing of the product. The Private Label buyer will assign their own name, SKU, descriptions, etc. to the product and will develop their own sales and marketing materials as needed.
OEM stands for Original Equipment Manufacturer and is typically used when one company manufacture’s another company’s unique designs/products. Let’s follow on with the example above. Let’s say that Susie Lou’s House of Seating has really taken off and Susie has designed a new chair that she wants to add to her catalog. She provides us with all the specs needed to build the new chair including drawings, dimensions, etc. and we build to her exacting standards. This is OEM manufacturing, and in this scenario, Barnes is the manufacturing partner and Susie Lou’s House of Seating is the buying and marketing partner.
OEM includes both components and complete designs. Let’s say Susie is building her own Susie Chair in her local work room but we are manufacturing her cushions for her. That cushion is produced under an OEM relationship. If Susie has us build the entire Susie Chair, it is still OEM. So this term has a lot of flexibility.
Like Private Label, OEM buyers are 100% responsible for creating the sales & marketing behind the product including names, numbers, descriptions, etc. However, unlike Private Label, the OEM buyer also stipulates HOW the item is built including the types of materials and methods used. Please note – many times our OEM buyers come to us with a design and together we determine the best methods and materials to use in construction. Once decided, these “specs” belong to the OEM buyer.
White Label, Private Label and OEM share the facts that the actual manufacturer of the product remains anonymous and the buyer is responsible for all sales and marketing of the product. The key differentiators between the three is who actually owns the design of the product and who does the branding and marketing of the product.