Private Label

ARE YOU READY TO HAVE YOUR OWN FURNITURE LINE?

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.



WHITE LABEL

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 Ted Scott Designs” 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

White 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 Ted Scott 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.

Typically White Label customers sell the item using our style names and numbers and typically only sell to individual clients or for specific projects.



PRIVATE LABEL

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 Ted Scott (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.

We use the term Private Label for when a customer plans to market an item for repeat sales.  If you sell our Savannah Chair to a client as part of a project or installation it is White Labelled.  If you give our Savannah Chair your own name and number, advertise and sell it in your store or online as your own chair - that is Private Label.

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

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, Ted Scott 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.

 



WHICH OPTION SHOULD I CHOOSE?

If you are working on a single project and want to order furniture, maybe you want to add your own name or label to the furniture - White Label is your answer.

If you are a retailer either just starting out or wanting to expand your furniture business, we recommend using our Private Label program.  These styles are proven sellers and all of the nuts and bolts of manufacturing (including size, dimensions, etc.) have already been worked out.   In some instances we may have renderings that you can use on your website (with a limited agreement) and can arrange to have those renderings “draped” with your chosen fabrics and trims for a small fee.

If your company is already selling your own styles of furniture but you are looking for a new supplier, OEM is your option.  OEM has its advantages in that every style is uniquely yours however the cost of setting up that manufacturing can be prohibitive 



PRIVATE LABEL REQUIREMENTS

Selling items under a Private Label arrangement is not that much different than White Label other than under Private Label you plan to market/advertise the item and not just sell it to a single client.

When setting up your studio, store or web site, we ask that you not use any of our style names, numbers or descriptions.  We do not want a retail customer to be able to find our items for sale at a price that may conflict with the price being offered by their interior designer. 

For example, Interior Designer Betty in Dallas is spec’ing an Ava Sofa for her client.  That client should not be able to log in to Jim’s web site in Charlotte and see a retail price for the Ava sofa as that puts Betty in a bind as to how she prices her products (we are all in this together!)

You may use our line drawings and renderings with a written agreement.



OEM REQUIREMENTS / MINIMUMS AND PRICING

Unlike Private Label, OEM relationships are more complex.  Under this type of arrangement we will be building your designs and styles to your specification.

Typically only those companies that either have an existing book of business selling their styles or have a very unique design aesthetic and professional furniture designers on staff should engage in an OEM relationship.

To build furniture under this arrangement we first have to get the patterns right so the item can be built repeatedly and consistently.  To do that you will either need to supply us with an existing frame or professional CAD drawings by an experienced furniture designer. 

From there we will build a sample frame and frame patterns, add basic upholstery for a sit test.   Needed adjustments will be identified, patterns will be updated and a second sample will be built if necessary.  The same process is repeated and while rare, a third round may also be necessary.

The initial round is typically priced at 3X the intended manufacturing cost (if we anticipate a chair will sell to you for $900, the Product Development cost to get it ready for production is 3 x $900 = $2700.). The first round of edits is included.  Subsequent re-builds are charged at an hourly rate of $125/hr.  These fees apply for each style being built.  Typically multiple widths of a style (for example a love seat and a sofa)  and be built as one sample unless than change in dimension creates the need for additional patterns.  For example, if a sofa is equal to the size of a love seat plus one cushion then we only need build the frame and make patterns once.  If the difference in size is not equal to a full cushion, new patterns would have to be made.   Most headboards require unique patterns for each size unless expanding the width from twin to king does not interrupt the design element of the headboard.

 

OEM MINIMUMS

Once a style is finalized, an OEM customer must commit to an order of 10 - 25 frames for each style and size, depending on the item being produced.  So let’s say you design a new headboard that you want to sell in twin, queen and king sizes.  You would need to purchase 10 twins, 10 queens and 10 king frames to get started.   You will need to pay for these frames up front.  We will be glad to hold these frames for you for a period of time (typically 1 year or less) while you generate sales.  As you place orders, the pre-paid cost of the frame will be deducted from your order cost.

Arrangements on the production and payment of future frame orders is dependent on sales volume and pace and is handled on a case by case basis.  

 

OEM PRICING

Typically our manufacturer’s price for an item built under an OEM relationship will be 15-40% below the price we would sell a similar item under a White Label or Private Label relationship.  These discounts are possible due to the volume production of frames and the repeat sale of the exact same item.   Using a limited number of fabrics (not COM) can also help reduce costs.



FABRIC

Under a White Label sale, all fabrics are COM.

In Private Label, you may choose to offer a limited selection of fabrics or you may offer COM on fabrics that you sell.

OEM relationships typically use a small, select collection of fabrics.  COM may be available for an additional fee.




HOW TO GET STARTED

White Label customers may simply place orders as a designer - no need to specify or call out that you are "white label" (everything from our plant is white label already!)

Private Label and OEM Customers

Email david@tedscottdesigns.com

with information about your line, needs and requirements - let's chat!