The lines are blurred in our vertical market about what constitutes a provider. Is it a company that just offers good products? Perhaps 20 years ago this was the case, but today many providers have become by necessity much more than suppliers of paper insurance products.

One risks disintermediation without a well-crafted suite of products, services, technology and training. Dealers demand, in exchange for the privilege of offering your wares, a host of profit, compliance, training and technological accoutrements.

In addition, the dealer’s loyalty to a provider is typically proportional to the level of commitment a provider is willing to invest in his success. The days of dropping off certs at the dealership and hoping the production fairy delivers bags of money are long gone.

Offering private-label products can be a great way for product providers to offer a wider array of services without the added burdens and costs of development, ongoing administration, state regulatory compliance and underwriting. Expanding the portfolio of products and services offered by your sales force will lead to greater profits and enhanced customer loyalty while fortressing your relationship with the dealer.

By definition, companies that private label their products operate behind the scenes while you attach your branding, logo and name. Let’s examine the scalability of adding one private-labeled product to your portfolio compared with an organic product offering. If another company will take on the responsibility for development, compliance, full-service administration and underwriting at a price point at or near what it would be for an organically “grown” product, the choice is clear. The time to market will be drastically reduced, your investment shifts from development to marketing and profits reach the bottom line in a shorter time frame.

Innovative Aftermarket Services (IAS), a provider of F&I aftermarket products, currently partners with six VSC administrators to offer private-label products. Bob Corbin, president of IAS, recently discussed with P&A the benefits of private labeling for his clients.

“Flexibility and cost are two of the biggest factors when considering a private-labeled product,” Corbin says. “Since we take on the responsibility of full-service administration and underwriting for our partners, they can launch a product quickly. Over time, private-label partner companies also have the option to take over part of the administration. Some companies only use us for underwriting, claims adjudication and payment.”

For the traditional service contract provider, what type of products are good prospects for private labeling? Corbin says products like tire and wheel, key replacement, paintless dent repair, appearance protection programs, windshield replacement and anti-theft systems are common.

Software can also be private labeled. If a provider does not have experience building a menu or an automated F&I reporting system, a private-label partner may be the best option in terms of development costs, time to market and tech support infrastructure already in place.

“Be sure to select a technology partner with the resources to invest in certified DMS integration,” Corbin advises. “This will ensure the stable and sanctioned interface your clients will rely on.”

Compliance and training programs are also candidates for private labeling. With a little research and effort, it should be easy to identify partners willing to build your brand while providing high-quality certification programs and training for F&I managers and other dealership personnel. In the long run, providing an effective training platform to the dealer that produces results is as valuable to your company as it is to the dealer. 

Numerous product providers attempt to offer dealers the “complete package”. Their value propositions are compelling, and their results are often noteworthy. It is possible to compete toe-to-toe with the larger companies by carefully selecting private-label partners, diversifying your portfolio of offerings, and mitigating the risk of losing an account for lack of … a few missing arrows in your quiver.