Custom HBC
Making Private-Label Products Affordable To The Masses
by Scott Eric Barrett
The Waconia, Minn.-based company uses unique technology to make customized products available to specialty retailers, where it previously hadn't been economically feasible.
Waconia is a Native American word that roughly translates to "one who is well-tanned," so it seems fitting that Custom HBC would be an important player in the indoor tanning industry. The company was founded in June 2000 by Larry J. Wilhelm, the company's president and CEO, who has more than 30 years experience in the health- and beauty-care industries. He has been associated with such leading brands as Crest toothpaste and Sesame Street children's toiletries, and was formerly president of Softsoap Enterprises and Minnetonka Brands. He knew for a long time that high upfront cost and required large minimum production runs made it difficult, if not impossible, for the little guy to get into private labeling.
"We believed that if we could eliminate these barriers, there would be a large untapped market out there in a number of different distribution channels," he says.
To do that, the company made three key developments. The first was its Web site--in particular, the site's Label Design Studio that allows customers to design their own private labels online for free.
"The site allows salon operators to upload their logo right into the site and then design the rest of the label around the logo," Wilhelm says. "You don't have to be a pro; it's all point and click. There are multiple backgrounds, colors and typefaces, so there are millions of combinations, and we are adding new elements all the time."
The second development was the digital label-printing technology that allows the company to print high-quality, multicolor labels in small quantities with no setup costs for printing plates. Wilhelm says label-printing plates can cost as much as $1,500 to $2,500 per label. "We'll print as few as six labels for some customers and they save all that expense of the printing plates," he adds.
The third development is a technology Wilhelm calls microbatching, which is the company's ability to make products in very tiny batches, as few as 25 gallons. He says that is unusual in the world of private-label or contract manufacturing.
"For a custom formulation, something that is not one of our standard products like a custom ingredient or fragrance, we'll do that and the customer only has to order a minimum of about 375 8-ounce bottles," he says. "Traditionally, the minimum order has been thousands. You put all those things together and it makes it very easy, fast and affordable for individual salons to get into the business of private labeling."
Quality Products
In addition to its private-label focus, Custom HBC understands the importance of quality. Wilhelm's company uses cosmetic chemists who are experts in their particular product category to develop product formulas.
"Our products contain generous levels of premium, state-of-the-art, tan-enhancing ingredients and proven skincare moisturizers, nutrients and soothers," he says. "Each product contains a custom blend of essential oils that results in fragrances such as creamy vanilla, juicy berries and jasmine. Salon owners don't have to compromise quality on their salon-brand products."
Custom HBC's products are all available in a 2-ounce trial-size bottle, 8-ounce resale-size bottle and 32-ounce pump bottle. Salons also can order products by the gallon.
Store-brand products are a great way for salon operators to improve their margins and overall store profitability, Wilhelm says. It's also a way to develop and enhance the salon's name and loyalty among its consumers.
"We will continue to develop and make available innovative tanning products such as bronzer/tingle combos, higher-end accelerators and products especially designed for the face," he says. "In addition, we provide other health and beauty products such as skin treatments, bath and body products, and professional haircare products that can be used or sold in indoor tanning salons."
