Harness the power of the private label

As private label ranges increase in popularity, RS Components’ head of Northern Europe and emerging markets for RS Pro, Guy Dann, wonders whether buyers are getting the most from this approach.

Private label goods have gathered pace in a variety of sectors, most notably the fast-moving consumer goods arena. Likewise, the industrial space has also seen the rapid emergence of private label products. There are a variety of benefits to choosing private label, with value no longer measured on price alone. So, what should buyers prioritise when looking to switch to private label products?

Careful selection
Private label products are most successful when they are within product ranges where innovation is limited or not required for the project. The goal here is to look for a product at a cheaper price point, which offers an alternative to big brand prices, but without compromising on quality.

Of course, brands survive because of their reputation for providing quality. They can charge more for the efficacy of their products and the peace of mind of dealing with a reputable company. Big brands need to recoup their investment in innovation from their entire range of products, however, and this can often drive prices up.

Private label ranges offer a viable alternative, but must demonstrate the same level of quality to compete with the big brands, at a price that’s attractive enough to encourage a switch. Finding a supplier that can offer a range of standardised, quality products at a lower price point is therefore key to savings.

Internet opportunities
With the growth of the internet, buyers have access to so much choice, but this can present both opportunities and pitfalls. It can be difficult to understand the quality versus price formula. Buyers should also be wary of the pitfalls associated with the unbranded grey market, where the evidence of a product having been tested, audited and inspected is often unavailable. Worse, buying from an unknown supplier could result in counterfeit products being bought, thus providing a false economy when the product fails.

Buyers should look to work with a supplier that can show proof of adequate product testing, a commitment to quality and performance and compliance with industry standards. A tangible stamp of quality and a guarantee should be high on the agenda. These elements, married with a price point which is even just marginally lower than the big brands, should be enough.

MRO savings
For buyers in maintenance, repair and operations, further savings can be generated through ease of ordering. Working with a supplier that has clear ordering and product referencing processes, such as including model numbers and names on the product, makes buying repeat products straightforward. Buying from a single supplier also reduces the administrative downtime of handling varying invoicing and payment terms from multiple suppliers.

Standardising products and processes drives efficiencies, creating savings. In fact, RS Components conducted some independently verified research that highlighted the cost of MRO procurement as being twice that of product cost. This makes it an element worth considering.

Ultimately, the opportunities to save money are evident, and so long as buyers don’t lose sight of the pillars of value, where quality and performance meet, they can realise these cost savings without having to compromise.