What Is Private Label

Private labeling is selling a product manufactured by another company under your company’s brand name. Retailers often use private-label products to offer exclusive items, expand their catalogs, and undercut competitor pricing.

Private-label products can be similar to existing products but with unique manufacturing specs. For example, a private-label business selling chocolate chip cookies must use a precise and completely original recipe. The same applies to private-label brands selling consumer electronics, jewelry, and clothing.

The private-label business model benefits manufacturers and retailers alike. Advantages include:

A unique value proposition
High profit margins
Customized pricing control
Customized marketing control
Adaptability

The private-label business model involves two types of companies:

Private-label manufacturers that work with businesses to design and produce products. Private-label retailers that brand, market, and sell private-label products to customers. A reliable private-label manufacturer helps ensure a profitable pricing model.

Knowing how powerful private labeling can be, you’re probably thinking about examples of private label brands. While some private label companies don’t advertise their goods, you’d be surprised at the businesses right under your nose.

Here are some private label brand examples:

IKEA (assemble-your-own home and office furniture)

Original Use (young men’s street clothing)

Tesco Everyday Value (pre-packaged grocery store items)

Universal Thread (women’s denim)

Prologue (working women’s clothing)

Heyday (consumer electronics)

Smartly (everyday consumer products)

The four types of private labels include:

Generic labels
Copycat labels
Premium store labels
Value innovator labels

You may be surprised to discover how many consumer products and national brands are made by private-label manufacturers. The model exists across most product categories, including: