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MYTHS OF PRIVATE LABELING?


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With all that private labeling offers, why don't more contractors sell their own brand?

Here are some of the myths and other reasons contractor hesitate to private label...

You Can't Find a Manufacturer Willing To Private Label

The biggest contractors can get the attention of any manufacturer (almost every manufacturer is private labeling today, even the bluebloods). To get a manufacturer to even talk with you about private labeling, you need enough volume for the manufacturer to worry more about losing your business than about your brand identity. If you can't get a manufacturer's attention, don't worry. This is why the Retail Contractor Coalition was formed. The Coalition has solved this problem for you.

You Lose Manufacturer Brand Identify

When you promote a manufacturer's brand, you're really subsidizing the manufacturer. Do manufacturers need your financial help? Can't you sell the homeowner any brand you want

Every sales trainer says people buy the salesperson first and the company second. If they buy these two, brand doesn't matter. Besides, most branding contractors have discovered that consumers prefer the equipment that carries the contractor's name. After all, it was specified by the contractor for the local climatic conditions. Who else can say that?

You Lose Co-op

This isn't a myth. Contractors who private label will give up their existing co-op from any manufacturer.However, those in the Retail Contractor Coalition receive manufacturer rebates that more than replace co-op because there are no strings, no rules, and no requirements that you use it to subsidize a brand you don't own.

You Are Unsure How to Start

If you haven't private labeled before, you probably don't know where to begin. The Retail Contractor Coalition started by working with contractors who have private labeled in the past. With their guidance we developed a step-by-step path.

You Fear Internal Resistance

The greatest resistance you are likely to encounter is not from your customers. It's from your employees. Technicians and salespeople have far more brand awareness than consumers. According to industry research, consumers barely recognize HVAC brands and seldom attach any position to them. This makes sense. Manufacturers don't advertise enough to influence consumers. Their advertising, whether trade or consumer, is really directed at the channel, at you and your employees. Since it's your industry, you pay attention. Manufacturer advertising is much more influential on you and your employees than on the consumer. As a result, the Retail Contractor Coalition prepared a whole series of products to help inform and persuade your company about the merits of private labeling.

You Fear a Lack of Support

Some contractors worry about a reduction in manufacturer business support and guidance. Those in the Retail Contractor Coalition receive far better business support from other members in the Coalition and from the Service Roundtable, which is included with your membership.

It Costs Too Much

Private labeling on your own is expensive. Not only do you have to source a manufacturer for your equipment nameplate and pay for the tooling and set up, but you have to create literature, cut sheets, training, advertising, material and so on. The Retail Contractor Coalition provides this as part of the program. The initial investment is $3,500 for the first year and $2,000 each year after. You should receive far more than this from your rebate. In other words, a Coalition membership doesn't cost you, it pays you. It's a profit center.

The biggest surprise you will have about private labeling is in how well it will work out. We're 99% private label and I'm not looking in the rear view mirror. It was without exception one of the best decisions we've ever made."

- Steven J Miles
Jerry Kelly

 

We are virtually 98% private label and haven't skipped a beat. Our customers love our line. Although our sales are only up about 2% over last year as of today, our profit numbers are up very significantly
...triple digit! Feeling great!"

- Robert Nelson
Bud's

 

We found that only a very small percentage of consumers care about the brand name on the piece of equipment. They are concerned about the installing company first and warranty second. With our private-label system, we feel we are offering the best of both."

- Steven Long
Gastonia

 

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