So you’ve crunched the numbers enough to know that you can sell e-liquid—a lot of e-liquid—and you’re starting to realize that you can increase your profits substantially if you could lower your costs. As an e-liquid manufacturer with over 4 years of experience creating brands and selling e-liquid I’m here to tell you that there is a way to both increase your profits and corner the market with your own brand. I’m talking about partnering with a manufacturer—otherwise known as White Labeling. It’s easier than you think and I can explain how.
Here’s the basics: larger e-liquid manufacturers excel at one thing, making e-liquid. They have the raw ingredients, the clean rooms, the machines and the human resources to produce high quantities of high quality product in bulk. As a shop owner or distributor who excels at selling e-liquid, you are able to dramatically reduce your price on product by purchasing a brand directly from the source and thus be able to increase your profits substantially per bottle sold. It’s the benefit of buying in bulk combined with the benefit of differentiating yourself from your competition. Also, and I thinks it’s worth mentioning that by partnering with a manufacturer who specializes in e-liquid production you will not have to incur any of the costs typically associated with making e-liquid. These often go unnoticed but the condensed version looks like this: labor costs, paying for graphic design time, finding all the right suppliers—i.e. companies that sell bottles, companies that sell flavors, companies that sell VG, PG, and nicotine, companies that print labels in bulk, etc. By avoiding these major obstacles you allow yourself to focus on what you do best, selling products and making money. The difference being, that with a white label agreement with a manufacturer you will now be selling products, differentiating your business, and making more money.
Here’s the process: First, get in contact with a reliable e-liquid manufacturer who’s knowledgeable, trustworthy, and capable of providing excellent e-liquid in a timely manner. Use google, go to trade shows, ask around, make calls and send emails. Ask these questions: how many bottles a month are they able to produce, do they have clean rooms, have they ever white labeled before, what is there process, do they know the cost per milliliter, where are the price breaks? Once you’ve opened the door of communication with the manufacturer explain what it is that you are looking for, be as specific as you can about what it is that you want; i.e. if cost is the primary concern, quality of the juice, brand recognition, turnaround time, warehousing options, minimum order quantities, or all of the above. Prices can fluctuate up or down depending on what you are specifically looking for. Then, simply listen, take notes and try to get a better idea of what the process entails. Most quality e-liquid manufacturers will have an encyclopedia of knowledge about where you can save money and time, labor, shipping, warehousing, and quantities.
I cannot stress the benefits white label deals have on a business enough. On the one hand, by partnering with a manufacturer you set yourself apart from the local completion by having a powerful business relationship and a unique brand that no one else is able to offer. On the other, you’re saving incredible amounts of money per bottle of e-liquid that you buy, thus profiting more per bottle that you sell. More savings equal greater net profits.
Granted, these deals are not for everybody and there are upfront investment costs associated with white labeling agreements. However, if there is a will there’s a way to overcome most, if not all financial obstacles. For example, many manufacturers are willing to set up payment terms to help offset the initial investment costs. This means that typically a buyer will only have to pay a fraction of the total investment before receiving their product, freeing up the cash flows to be used elsewhere, then paying the remainder after the white labeled product has started selling. It’s important to remember as well, that the initial order is always the largest. As product sells and as the popularity of the brand increases the inventory needed to refill each skew will never exceed what the initial order demanded. That’s a complicated way of saying refilling a skew or two is way less expensive than the initial cost to set the whole thing up. Overall, the pure profit generated by partnering with a manufacturer to create a unique brand for your shop or distribution company will more than make up for the initial investment costs.
In essence, if you are at a point in your business where you recognize how much more money you can make by just lowering your costs on e-liquid, then white labeling might be the perfect option for you. Make the decision to get in touch with an e-liquid manufacturer and open up as to what it is you are looking for. Be specific, demand explanations, and work with the manufacturer to lower costs. If there is any hesitance about how to pay for the initial order, set up payment terms that work for you. Lastly, rejoice in the fact that you have set your business up for increased profits, better recognition, and ultimately more success. SVBS
James Deighan is Director of Marketing with JJuice LLC. Mr. Deighan has over 4 years of experience directly involved in the vape industry and 2 years as acting director of marketing for JJuice LLC. Prior that that, he had 4 years of business experience in Sales, Marketing, and Strategy at Qivana LLC. He can be reached at 801-331-8919, or by email at [email protected] or visit his website at www.vapejjuice.com.