The world of private labeling (PL) has an identity problem. On the one hand you have stores with a great reputation putting their names on products that fit their prestigious image, and on the other hand you have big box store brands offering private label merchandise as inexpensive (basically generic) alternatives to major brands.

The advantage of private labels for discount retailers is that it allows them to come up with a name for their store or house brand that may sound somewhat prestigious — but the products brought in under their own label can be marked at whatever profit margin desired. In other words, the goods are “price blind” compared to a name brand that may be subject to consumer comparison shopping. In the world of food, Archer Farms at Target and Whole Foods’ 365 Everyday Value line are good examples.

Some of the store brand items are goods brought in through direct import, especially from China.  But there are also companies that manufacture merchandise in the US that is sold through private labeling (for example the graphic for today’s blog comes from a private beverage company, Supreme Manufacturing).  By avoiding the huge advertising budgets of major brands, these goods can be priced lower even if they are of comparable quality.

Smaller retailers can use private labeling to enhance their own name recognition, and to benefit from shoppers’ loyalty to a particular business.  If you decide to try this, you will of course want your name associated with merchandise of the highest quality, and that fits your store image.  Candles, bath and body products and foods are often available for small quantity orders featuring private labeling.

Some farm shops use private label products to supplement the goods that they manufacture or grow themselves.  Caution should be used when labeling an out-of-state product with a local shop’s name and address, of course. It is not good to deceive customers who think that they are purchasing a regional product if that is not the case.

In working on setting up a private label line, watch for case pack minimums and plate charges when you add your art work to the labels.  Make sure that your designs meet your store’s standards.  Attractive private label products should enhance your brand image and your store’s name recognition by associating both with high quality products.

We’ve done a bit of private labeling on soaps and candles over the years, and have also packaged a few products ourselves with our store name on them. Although they haven’t been the profit center that retailers subscribing to PL Buyer magazine expect of private labeling, these items have helped set us apart from our competition.

Happy Retailing,

Carol “Orange” Schroeder