Better to rebrand or not?

[maxlane]

I've been asking myself this question for the past year or so. Is it better to rebrand all the products you have and sell them under your own brand name entirely, or is it ok to market other people's product under the original brand - or is it better to have something in the middle?

My reasoning is that rebranding is very good in the long run (is this is the case? under what conditions?), but at the same time one can use the argument of not rebranding to get a better price because you will be marketing their brand and contribute to making it more wide spread. But also if you market the original brand then you are also telling everyone where they can get the products in bulk and cheaper as well. What is the best long term approach?

I've heard a guy who is very good at what he does say that "marketing someone else's brand is suicide."

What do you think?

 

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[paqman]

What is the product/service?

Rebranding can be lucrative, but you definitely take 100% of the risk (controlled by you) should your brand disappoint. Right now you're simply a man in the middle and can take all your selling assets and find a new supplier (if you ever needed to).

I guess it would be nice to know the product or service, what your specific role is with product/service, customers, sales process, etc.

Then everyone can provide much more insightful knowledge.

 

[healthstatus]

Amazon and Ebay are doing OK selling other people's products.

 

[Vigilante]

The third alternative.

I prefer to not market anything that has a direct competitor. So...

If I were bringing in shoes for resale, I would source a shoe nobody else has. There are thousands of shoes in Asia that have been developed but never marketed in my country. So...

I would not simply rebrand what someone else has already developed from a sales and marketing perspective. In that scenario, you literally are just having to directly compete with a knockoff of something that already exists. In that scenario, almost the only direction to go is down in price, tightening margins against an established brand.

Find something unique that you can bring into the market to add value to a marketplace void of what you have.

Go for the third alternative.

A. Use someone else's brand and help them build their brand? Pass.
B. Rebrand their products to your brand and then compete with them? Pass.
C. Find a unique value and launch it into a sales channel that doesn't have it. Go.

 

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[CEBenz]

While plenty of people seem to be successful building their brand using products sold under other brands, I think that once you have the ability to buy big enough quantities, it's time to do what Vig said. The only reason I think one shouldn't do it from the get go is if they don't have the cash or credit required to purchase the quantities necessary for customization or exclusivity.

 

[ZDS]

The third alternative.

Go for the third alternative.

A. Use someone else's brand and help them build their brand? Pass.
B. Rebrand their products to your brand and then compete with them? Pass.
C. Find a unique value and launch it into a sales channel that doesn't have it. Go.

I can't stress this enough. As someone who has a product with DIRECT competitors(literally the same product) -- Find something with a USP! It's hard to brand something as quality or "a premium product" when there are exact duplicates out there. You're literally relying on being lower priced or hoping they don't see the other companies.

 

[nitrousflame]

...
Go for the third alternative.

A. Use someone else's brand and help them build their brand? Pass.
B. Rebrand their products to your brand and then compete with them? Pass.
C. Find a unique value and launch it into a sales channel that doesn't have it. Go.

Good stuff.

I'm at stage B with my first attempt, and it works, but it's not as good as level C.

Just want to point out that in some cases, you can go from B to C simply by having the supplier paint a stripe or unique label on the product for you to make it unique. This alone bumps the barrier of entry up for would-be copycats.

 

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[Jake]

I'm in a similar situation. I found a great product that I want to test the U.S market with. The company who produces said product responded to me immediately when I showed interest. I said I wanted to re-brand their product and they no longer speak to me (I assume they only want their own brand sold).

So I sent the product to China to have a small change implemented and I'll be testing my own product in a market where it currently doesn't exist. Hopefully the company ends up losing a lot of money by not allowing me to re-brand... time will tell.

I'm not interested in building other brands. Some companies are out there running businesses selling other people's products so it all depends on the operation imo. Money can be made either way but if you want to scale and potentially sell the business I believe I'm making the right choice.

 

[Vigilante]

I'm not interested in building other brands.

Large companies are adopting this same principle. Best Buy will very seldom look at a start-up or third tier brand, choosing instead to source and promote their own non-brands. Their theory is "why should we build your brand and your equity... when we can build our own?"

Hand in hand with that, selling someone else's brand is dangerous on Amazon.

Two articles related :

Small Retailers on Amazon Say Amazon Is Sometimes a Competitor - WSJ.com

How to Defend Your Designs Against Knockoffs | Entrepreneur.com

 

[ZDS]

This is actually a huge play by Amazon.

Example: I was originally looking at importing Bamboo Towels. I sourced a manufacturer and began doing my due diligence.

However upon further inspect, I noticed this as the top of amazon:

Amazon.com: Pinzon Luxury 820-Gram Cotton Bath Towel, Marine: Home & Kitchen

I thought, ok -- It's just competition from some brand right? Wrong. Pinzon is actually a private label brand done by amazon. They've been quietly launching these types of products across multiple niches under multiple private label names.

I'm all for competition, but personally I'd definitely prefer to not compete WITH Amazon, ON Amazon.

 

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[maxlane]

A. Use someone else's brand and help them build their brand? Pass.
B. Rebrand their products to your brand and then compete with them? Pass.
C. Find a unique value and launch it into a sales channel that doesn't have it. Go.

I have done A and B so I'm on C.

purchase the quantities necessary for customization or exclusivity

This seems to be the barrier. What's the strategy to use here? I can get credit, but only if I have orders on the table. So I need to get the orders. So my reasoning is that I need to get better at creating attractive offers and be putting them out there so I can get the orders, then the credit, then buy larger quantities. Is this a slow way?

My products are found in every home. But they are long lasting so the purchase cycle for some products is 10 years, others 40 years. Basically you get it and then you don't change it. But every newly built home needs it. Also many people who have old buildings also are potential customers, so the reasoning is that continuing to reach out to new customers will always yeld some sales. A small company with 8 employees doing this business makes $2.4M/year turnover with 6.5% profit, another with 50 employees marketing the same family of products does $15M per year with 5% profit. $150k to $300k per year turnover per employee seems to be average. That's what I was doing myself when doing all the sales myself.

Maybe one direction would be to approach companies that are building new homes, buildings and supermarkets and try to get a bigger order in order to be able to gain exclusivity with the supplier. Because a large volume would be needed to get the supplier to refer all customers to me.

What type of arguments can I use to gain exclusivity with a supplier? Should I aim to gain exclusivity first before approaching potential big customers or should I get the sales first and use that to gain exclusivity? Seems like a chicken and the egg kind of problem. Also seems that marketing something on a large scale without having a written exclusive contract would be risky since there would be nothing preventing the customer from buying directly from the supplier should they find out who the supplier is?

 

[Vigilante]

Yeah. Some times the factories get it, some times they do not. We walked a year ago from a supplier who had zero U.S. distribution, but would not give us a 90 day window to market test for viability and sales potential. We checked in with them at the six month mark - still zero US sales and still no. At the one year mark, still no U.S. sales, but at that point they are not intelligent enough for us to engage with anyway.

So :

1. Do you have any United States customers? If no, then proceed to test discussions.

2. If yes, than has anyone on the United States ever purchased this item before? If no, then proceed to test discussions.

3. If yes, then likely pass.

We don't want to compete. We can compete against other products in our category, we just don't want to compete against an identical item in the marketplace... because there is literally only one thing that happens and it is predictable and uncontrollable price erosion.

 

[Vigilante]

Strategies for exclusivity:

1. Test order to check packaging and quality
2. Test order to show it to "buyers" in the market
3. Prediction of what happens if successful (i.e. if this item works our annual quantity would be around 50,000 units)
4. We normally don't pay for samples, but in this case we want 10 units so we will pay you for the samples.
5. We plan to have #1 marketshare in the United States in XXX and want to test your products now before the Christmas selling season
6. If this is successful, within 90 days we should be able to place our first order for 500 units
7. We need exclusivity so we can keep our prices higher, and keep the prices we need to buy the merchandise from you higher
8. Competitive units in the market retail for $x.xx (here's an example link http://www.---.com)
9. We are successful, but we don't know how your item will do so we should test this together and we will share the results with you
10. We only buy items that we can sell on an exclusive basis into our country
11. We can develop this business for you as a partner
12. We want to test a few models, but eventually we would like to market every model you have.
13. Eventually we would like to have the unit branded with our logo on it and work on packaging with you
14. If this is successful, we will bring all of these opportunities to you first in exchange for exclusivity
15. In 2014, we plan to hopefully buy xxx,xxx units once this business is strong
16. It's in your best interest and ours that the prices stay as high as possible
17. We're the best at what we do
18. Here's my LinkedIn profile so you can see what I have done in my career
19. We do business with Home Depot, Wal-Mart, and Amazon
20. We have purchased from your competitors but we believe your products might be of better quality
21. We will give you exclusivity back... if this works we will buy all of our hammers from you as long as you remain competitive with great quality
22. We have some ideas we can bring to you later about how to get even more business
23. We do what we say we will do. We will never surprise you.
24. We won't buy it if anyone else is buying it in the United States. Do you have any products that you have not shipped to the United States before that we could test?
25. Here's cash.

 

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