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What Are Private Labels?

Private Labeled Products
Walmart Private Label Ibuprofen

What Are Private Labels?

 Private labels are “white label” or “private brand” consumer products that are uniquely manufactured by one company and sold under a different company’s own brand name. These private labels have custom artwork, logos and marketing.

 

What is Private Labeling?

Chocolate labels
Private Chocolate labels

Private labeling allows retailers and stores to sell a product that they do not manufacturer, the production of the product is made at a specific manufacturing company under a special contract, with specific requirements for quality, materials and design. This works for large chain retailers because they do not need to invest capitol to start their own line of consumer and food products.

 Private label printing is all about the marketing on the sticker. These marketing tactics and techniques are used to create a positive image of the product label in the consumers eyes, and to help distinguish that label from a competitor’s label.

Private Label Products Have More Profits

In the past, private labels were frowned upon by consumers, today it is the number 1 choice. The main reason is because profits on selling third party food products is around 1% or 2%. The profit margins on selling private label products is around 25% to 30%. So retailers prefer to make more profit selling the private labeled brands.

Younger millennial consumers, who came of age in the 2008 recession, are less dependent on brands and brand loyalty compared to their parents and grandparents.

These new private label products in many cases are premium private labeled products.  These private products are now competing with the world’s biggest brands on quality and marketing. To reduce competition from the worlds top established brands, retailers like Publix, Walmart, and Target are adopting smart branding strategies for their private label products that can take advantage of real time feedback from customers buying in real time with their wallets. This growing market for private labeled products indicates that shrinking market for high priced international brands. This creates a opportunity for smaller retailers and brands to join the fight. Everyday consumers are getting more used to these private branded products, which is good for the consumer because this lowers prices for them, saving them money.


Private Label Categories

Lets look at some of the popular private labeled products trending with consumers.

 

Advantages of Private Labeling

But what are the advantages of private labeling?

 

Disadvantages of Private Labeled Products

The disadvantages are few, but still important and should be mentioned.

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