If you’ve been in the ecommerce world for a while, you'd know that most sellers source their products from China. In fact, China is the world’s largest manufacturing power and mass-produces nearly a third of the world's goods. But there are still lots of third-party sellers who prefer to keep the supply chain as close to home as possible.
In this guide, we’ll reveal some of the top manufacturers in the USA where you can source your private label products.
Related Reading: The Best Countries to Source Private Label Products From
How Does Private Labeling Work?
So first things first. What is private labeling?
Private labeling is when a business owner pays a manufacturer to produce a product using the business’ logo and brand name. This business model has the potential for higher profit margins.
Instead of just reselling already existing products, business owners can make a product on their own, allowing them to make improvements and differentiate their products from the competition.
In the last few years, there’s been an increase in the number of entrepreneurs that have chosen private labeling as their main business model because it generates a profitable income stream.
Benefits of Private Labeling
- Higher profit margins
- Helps scale and grow your business
- Differentiate yourself from your competition
- Build credibility and customer trust
- More flexibility when setting the price of the product
Amazon is one example of a business using private label manufacturers. The ecommerce giant has a portfolio of around 88 private label brands, making them highly competitive.
Why Should You Consider Sourcing Domestically?
China has been the number one exporter of goods for ecommerce sellers for years. If you’re an Amazon seller, there’s a big chance that you’re sourcing your products from China. This is because doing so is generally cheaper and you’ll have your pick of suppliers since they’re usually clumped in the same regions.
However, there are a ton of advantages of sourcing from the United States.
The following table summarizes the pros and cons of sourcing locally:
Pros of Sourcing From the United States
- Verifying manufacturers is easier
- Shorter delivery and lead times
- Higher quality products
- Products are labeled “Made in the US,” which, for many shoppers, is a sign of quality.
- The closest you are to elements of your supply chain, the more control you have over them.
- Suppliers are less difficult to communicate with (no language barrier or big different time zones)
- No need to pay import taxes
- Easier to visit the manufacturer
- Help the local economy
Cons of Sourcing From the United States
- Higher manufacturing costs
- Fewer manufacturers to choose from
- Fewer product choices
Top 5 Factories for Private Labeling in the US
Here are some of the most popular supplier directories where you can find local manufacturer profiles.
Thomasnet is a free online platform for product sourcing in the US and Canada that connects manufacturers and market buyers and sellers. It allows you to search for manufacturers by product and localization.
This directory is full of manufacturers’ listings where you can find all the information of each company, including product information, history, size, annual sales, and a few more details.
Besides, if you’re interested in contacting one or a few, you can send them an email, request a quote, or visit its company’s website.
Maker’s Row is another online marketplace launched in November 2012 that connects American manufacturers with businesses.
The company provides an extensive database of suppliers and products covering the North American geographical landscape.
The downside of this platform is that it’s not free. You’ll have to pay a fee to access all of its features (from searching factories, and accessing project files, to messaging factories), which ranges from $60 to $150/per month or $576 to $1,440 per year.
Founded in 1999, MFG is another popular manufacturer directory which caters to sellers in the United States, Canada, Asia, Europe, and South America.
You can just visit the directory and navigate through their manufacturer profiles. Moreover, you can also register for free as a buyer, and once you do, you’ll get access to more features, such as requesting quotes, messaging the company, and others.
Kompass is a free global B2B portal where you can connect with millions of registered businesses in 60 countries.
While Kompass may not be as large as some of the other directories mentioned above, it works the same way as the previous directories, and it also branches out beyond North America.
SaleHoo is a market research tool, supplier directory, and online community for dropshippers and e-commerce stores.
Above all, SaleHoo has a directory of over 8,000 suppliers, many of which do private labeling. Also, it offers market research tools to compare product ideas to help you find the right product.
However, just like Maker’s Row, you need a paid plan to access their features. They offer two options: one-year access for $67 or lifetime access for $127.
One of the biggest early challenges of ecommerce sellers is finding the right manufacturer. It’s not easy and it takes a lot of research, a lot of back-and-forth, and some negotiating skills.
Many private label sellers still prefer to source overseas, but only a few have tried sourcing locally.
Before working with a Chinese Supplier, it’s worth asking yourself what your expectations would be if this same supplier was in your local country.
Have you tried sourcing products locally from the USA? What were the biggest advantages you found? Share it with us in the comments section below.