Private Label

What is Private Label?

Private label product, also called “white label” or “private brand”, is a unique product produced by one company but packaged and sold under another company’s own brand name. Private labeling allows retailers to use contract manufacturers to produce items as per their specific requirements (quality, materials, design, etc.) without investing much capital to start their own line of products.

What is Private Label Branding?

Private label branding is all the marketing tactics and techniques used to establish a positive image of a private label product in order to identify and differentiate it in the customer’s eyes.

Although the majority of private label goods and services are positioned as cheaper alternatives to the well-known national and international brands, a new generation of “premium” private label products has recently started competing head-to-head with the world’s biggest brands on quality and brand positioning rather than price. To cut into the market share of these well-established rivals, retailers need to adopt smart branding strategies that take advantage of the almost real-time feedback from their customers who are voting with their wallets.

The overwhelming growth trend of the private label goods indicates the diminishing advantage of higher priced international brands and suggests a unique sales opportunity for smaller retailers. As consumers are warming up to the idea of switching to private label brands, it’s an exceptionally good time for eCommerce retailers to jump aboard and experiment in this space.

Private Label Categories

With only a few exceptions, almost all consumer goods categories benefit from both private label and established brands’ offerings. Some of the strongest private label categories include:

Advantages of private labeling

Thanks to their numerous advantages, a rapidly growing number of retailers are eyeballing the opportunity to use private label products as part of their merchandise lines. Here’s why:

Disadvantages of private labeling

While the disadvantages are few when compared to the advantages, they still need to be considered.

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Justas Markus: CEO & Co-Founder of GetFound XL and a blogger at Entrepreneur.com, Observer.com, Influencive.com and others. Catch up with Justas on Twitter.