Private labeling

[LotusFlowerSoap]

I have been approached by a salon here to develop an entire line of mani/pedi products for her, both for use in her treatments and to retail to her customers. Let me caveat this by saying that really, I have the products already, but she's requesting specific blends, and minor changes to what I currently offer, so I am making certain things at her request.

She's asked me to design custom labelling and to allow her to sell it under her name as a line exclusive to her salon. My knee-jerk reaction was, "Hell no! It's my line and I want my name on it!" But then, after giving it some thought, I'm not sure I really care. I mean, if she's purchasing wholesale amounts, and is willing to pay for the design of her image, which she is, why do I care? I'm still selling product. She's getting a line she can market as 'hers,', which makes her salon more upscale. Is there really a loser, or is it win-win?

I did tell her that I was not going to give her straight-up exclusivity to any products or essential oil blends, since they are my intellectual property and she is not paying enough for me to give up other potential revenue streams, but of course I would not sell anything with her labelling on it, or under her name.

Anyone else done this? Thoughts?

 

[donniej]

Here's what I'd do...

I own the recipes, and I don't share them. As long as your quality stays the same and you don't raise prices, then your exclusive control of the recipe should motivate the owner to keep using you.

I would give her exclusivity to her modified blend but unless she can pay you enough, I wouldn't stop selling similar products to others.

Private labeling is fine and long as she is willing to pay any added costs. I would insist that my company name be put in small print on the packaging, it may be required (I don't know) and it could only help you. You know, something like "Manufactured exclusively for XXXXX by YYYYYY."

 

[Chay]

I think you are right on track. Sell her the products with her private label but do not give her exclusivity to the product. And I would definately have some kind of contract.
Congrats on a fantastic opportunity!

 

[Tabitha]

What they said...

Bath & Body Works dos not make their stuff. If you read the bcak it says made for BBW, etc, etc.

Sell it as private label & hope they come back for more & more and more.

You may want to charge a design fee for the labels. I offer 3 private label options.

1) My labels but I drop my logo & add their logo at no charge.
2) I design new labels at a design fee of approx $150.00.
3) I sell naked product & they can make their own labels.

 

[LotusFlowerSoap]

Thanks everyone for the feedback. I told her it would be about $210 for the label design, and she seems happy with that amount. That covers my cost and time to do it.

I will definitely put something along the lines of "made by LFSS for XXX". And yes. A contrat. In my day job I'm run a contracting department, so if anything I'm a bit over the top when it comes to having everything in writing!

I appreciate the input. This forum has been invaluable to me!