What is a Private Label Brand? Explained in Simple Terms

Put simply, private label brands are a brand that’s owned and sold by a specific retailer who has control over the entire production and selling process. Understandably, there are powerful players in the industry. Mainly because, they aren’t held to the same constraints and restrictions as those that utilise third-parties. Instead they can keep an eye on everything from the quality control to the design. Furthermore, they can market however they wish and are able to change elements of the process much easier than they would be able to otherwise.


In this article we delve into what exactly private label brands are and why they’re such a huge game-player in the industry.

Person Using Black And White Smartphone and Holding Blue Card. A private label brand in hand

Photo by PhotoMIX Company from Pexels

The Power of Private Label Brands 

So, when retailers choose to private label a brand, they have control over the entire production process. Above all, this means they can achieve higher profit margins. Of course, because they can cut out the middleman for things and choose the best options in all areas. From the manufacturing to the packaging to save costs and retain the quality they’re after.


More so, they can build brand loyalty, differentiate themselves from competitors. Perhaps even explore innovation in their products and have greater retailer control. Private label brands can also brand products that will resonate directly with their target market based on their own research and experience. Therefore, this means it can harness customer brand recognition and become the customer’s primary source for the item on offer.


According to a study by Statista, 82% of consumers in their survey said that private label products are better value than national products. Making this even a further indication of the power private label brands hold.

Exploring the Benefits of Private Label Brands

Understandably, private label brands can offer a myriad of benefits both to consumers and retailers. This includes:

Higher profit margins

First benefit worth mentioning, because with control over all elements of the process and no need for third-party manufacturers and distributors, retails can cut costs and improve their profits


Better cost control

Of course, with enhanced control of the production costs, businesses can manage pricing depending on the circumstance. Therefore, react much quicker than they would be able to otherwise. Instead of waiting for other sign off and approval, they can mark prices up or down and remain competitive in a fast-paced market


Better quality control

More importantly, retails have more control to be strict in quality control measures so they adhere to their standards. Therefore, this can help build customer loyalty and reduce refunds or bad reviews.


Greater customisation power

Last benefit worth mentioning, retailers with private label brands are much freer to tailor products and offerings based on their own target audience. They can customise products depending on where it’s being sold. More so, if there are any seasonal changes and trends and taking external factors into account. This in turn can increase sales and improve brand loyalty.

Facade of a Shop saying Chanel. Private label brands can include Chanel.

Private Brands vs. National Brands: What’s the Difference?

First of all, private label brands and store brands are the two main types of brands in retail and while they might seem similar on the surface. However, they differ in many areas. For example, in the way they’re owned, produced, marketed and distributed are distinct from one another. Showcasing just how different they are. Furthermore, private brands are owned and sold by a specific retailer and are exclusive to them.


National brands on the other hand are owned by companies that sell their products to multiple retailers meaning they’re sold in numerous different places.With private brands the retail controls all parts of the production process, marketing and distribution. However, national brands on the other hand, are typically manufactured by a third-party company that tends to specialise in production. Their marketing might be done by an external company and they’re available in a wide number of places to purchase.

How to Successfully Build a Private Brand

When looking to successfully build a private label brand, there are some things you can do to help yield success:

  • First example, do your research. Find out what’s missing in the market and what your niche could be
  • Secondly, find a manufacturer that you trust. While you might not know of any manufacturers, when doing your research, be sure to find one that seems reliable and has good reviews. Therefore, check if they have a minimum order value and any other terms they might apply. 
  • Then it’s time to test your products. After all, this is such an important phase in the process as you want to provide your customers with something they love and that you’re proud to sell. 
  • Fourth step, set up an online store. Remember that your store is the place you’ll sell your goods so you want it to be visually appealing and easy to use. Of course, you can either build this yourself or can work with a freelancer or external designer to put this together for you. Make a brand mark that customers remember. 
  • Last but not least, look into marketing. Obviously, marketing is what will get your private label brand in front of your target audience so by having a strong marketing strategy you can make money and get your products noticed.

Understanding the Rise of Private Brands

Interestingly, national brands have been rapidly increasing their prices, but their products haven’t necessarily been following the trajectory. In fact, more people than ever are experiencing shopper dissatisfaction. Finding they’re just not getting the same value for money as they’d like. This is one main reason people are switching to private label products instead. With a focus on better value and higher quality, they’re a real game changer in the market. It’s evident that private label brands have better control, a tighter understanding of their customers. Even have the ability to be more flexible in their approach, all of which is contributing to their rise in success. With the ability to be unique, stand out from the crowd and boast enviable quality, it’s a no-brainer.

Investing in Private Label Brands: Worth It or Not?”

When it comes to investing in private label brands, it really is an effortless choice. According to a study by PLMA’s 2021 Private Label yearbook, supermarket private label sales are up by 13.2% and this is only expected to continue to rise. With such a positive outlook both in the near and far future, the question on whether or not to invest in private label brands shouldn’t be a matter of if, but when. Are you ready to do so? Remember it is a bit like having a change in lifestyle brand

Wrapping Up On Private Label Brand

In conclusion, a private label brand is a product manufactured by one company and sold under another company’s name. Most of all, private label products are increasingly popular among retailers as they offer an opportunity to increase profits. Easier to control the marketing and sales strategy, and differentiate themselves from competitors.


Therefore, private label brands have come a long way from being perceived as “generic” or lower quality products. Today, many private label brands offer quality products in various categories, such as food, beauty, and apparel.


Furthermore, retailers can work with manufacturers to customize products to meet their specific brand requirements. Allowing them to stand out in their respective markets. Overall, private label brands offer a smart business strategy for retailers looking to grow their brands and increase customer loyalty.

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