recently I put up a video talking about our white labeling Services which is essentially making products making candles for other businesses and I had a lot of questions in the comment section of that video and I also talked a lot about pricing in that video but ironically Chris and I have actually changed up how we charge for white label so I wanted to bring that up in today's video since that video is still relatively new so I think I'm actually may take that video down and EXP explain more about the way that we are going
to about charging moving forward because I think it makes a lot more sense to the retailer and it's more beneficial to both parties involved hello and welcome back to my channel if you're new here my name is Erica with memory box candle Co and I make videos all about the Journey of starting a candle business and today's video I'm going to share an update on our white labeling services so first and foremost I just want to explain what white labeling is is so essentially what white labeling is is it's an additional service that we offer
on top of wholesale so we do all of our wholesale transactions Through the Fair platform but for anybody that is looking for a manufacturer for their own branded products that is something that we can do via white label services so we offer two different kinds of white label services on Fair there is the unlabeled unbranded version and there there is the custom label option so in my previous video I talked about how any products that we offer where we are not going to put any label on there and the uh buyer is going to put
their own branded label on there we charge an additional $2 onto every product on top of wholesale pricing and then for custom labels we do $4 on top of every product for wholesale pricing and that's what I've been doing but when Chris and I really sat down and we thought about it it just seemed off it seemed like too much to add $4 on top of the cost of let's say a wax melt that is $3 wholesale adding $4 on top of that makes that a cost of $7 which doesn't really leave that much room
for them to have a profit margin for their business so we really wanted to take a step back and look at the pricing and see how we could adjust it and what made the most sense to us was adding on an additional fee for white label based on a percentage of the product price so for instance all of our products are going to have a different increase amount based on the actual Pro price of the product so for a wax melt $3 adding $4 on top of that which is even more than the price of
the item just seems outrageous and now we've actually adjusted it I have the number right up there we've adjusted it to a $1 additional add-on price so instead of $3 it's $4 for a customized label with the brand name and then for No Label on there it would be an additional 50 cents for the buyer to add their own label onto the product it averages out to about a 30% markup in fee for white label for the customized branded option and then a 15% markup for the No Label option for the customer when Chris and
I were going over this this seemed a lot more reasonable for both giving us the additional amount for the extra work that goes into being a manufacturer for another business and not necessarily being able to take credit for that product by having our brand name right on the front of the product but it also gives the retailer a little bit more of a profit margin because our goal is not not to just charge a ton of money we want it to be mutually beneficial we want them to be able to still have a good profit
margin so that they can be successful in their business so that they'll want to keep returning and buying more products to then sell for their business and then it keeps that B2B business model going it's not just about us having like a one-time interaction with a retailer and just trying to put a bunch of money on there which was not my intent in the beginning I really am just learning learning all the time and learning you know okay well I know that doing white label with us not having our brand name on it and taking
the extra time to create these custom labels and print out and do test prints and all that kind of stuff and my knowledge of that I do want to charge for that our labor and time that goes into it and also the fact that you know we're creating a product for another brand which kind of you know you can charge a little bit more for that as well so when I chose the $2 and the $4 that just kind of made the most sense to me to charge you know a little bit more and to
kind of make it as easy as possible to understand and also Implement on the fair platform since they don't really have an option for that for each product which I really hope that they update that in the future and make that an option because I think that that would be a really good feature for them to include in there but I did just want to take a moment to update you on this topic because I know that a lot of you are interested in making candles for other businesses doing White labeling in your own wholesale
business and I thought this would be a better way to explain how to add on a markup for white label I think doing a percentage of the product price makes a lot more sense especially when you are selling products that are on the less expensive side so we have our little gold candles and our wax melts that are between three and $4 so adding on$ two or4 doll onto that price is a much larger percentage of the actual product price versus our larger candles where it doesn't really seem like that much of an additional add-on
because the product itself costs a lot more and then before I end today's video I just wanted to answer some questions that I had received in the comment section of that video the first one being is our brand name anywhere on the product for white label and yes it's actually on the warning label so on the warning label no matter what if it is wholesale or white label and I always let the um buyer know this who is interested in white label is our warning label has to say manufactured by and then our brand name
we have our city state and zip code on there and that's just to abide by labeling laws you have to say where it was manufactured and um most of the time actually all of the time none of the retailers have any issues with this and when I had stated in that video saying that you know are people taking credit for your product I meant in terms of when you look at the candle you're seeing somebody else's brand name on it it doesn't necessarily mean that the retailer is saying that they are the ones who made
the product it is not you know it's not on me to really control that I can't control whether or not people are saying that they're the ones making the product but from the white label clients that we have worked closely with none of them will say that they are the ones who are making the candles but again I can't control if the retailer chooses to tell their customers that and and then the second question I got asked a few times on that video had to do with liability so who is liable for any damages or
anything that happens with that product with the end consumer is it you as the manufacturer or is it the retailer that purchases from you and I'll just say this I would recommend that you set up and treat your business as if you will be liable for any damages that happens at any point um so make sure that you have at the very very least business insurance this is kind of like a like a no if ANS or buts kind of thing I couldn't think of the word um and also if you're not already I would
look into getting an LLC so this is going to be forming a business entity and separating your personal and your business assets especially if you are somebody who has a lot of personal assets like if you own a home or anything like that you want to make sure that you are protecting yourself I don't know all all the legal stuff I'm not a legal professional so I don't know every instance and all that but that's how I set myself up so I know that doesn't really answer the question but every situation is so different and
so unique wherever you live so I would just run your business as if every product that leaves your possession that you will be liable for but with that I am going to end today's video right here if you enjoyed today's video make sure to leave it a big thumbs up as well as subscribe to the channel if you haven't already also don't forget to follow me over on Instagram @ memorybox candle Co and I will see you in my next video [Music] [Music] [Music]