A private label refers to a marketing strategy where a company sells goods and services under its own brand name rather than the manufacturer’s brand name. A third-party manufacturer, often called a private label manufacturer, typically makes private label products that are sold under a private label brand or store brand.
Private labeling allows retailers, online store owners, and businesses to offer their customers exclusive products while maintaining control over the quality and pricing of their products. Companies can increase profit margins and build brand recognition by selling private label products. Private labeling is used across various industries and product categories and has become increasingly popular in recent years.
A private label product is manufactured by a third-party manufacturer but marketed and sold under the brand name of a business owner or retailer.
Private label products are also known as private label goods or brands. Private label products are typically produced by private label manufacturers and are sold under a private label line. This business model allows the business owner to create their own brand name, target a niche market, and build customer loyalty.
Common private label products include food and beverage items, cosmetics, personal care products, and household items. Private label products are similar to white label products that are manufactured by one company and then rebranded and sold by another company.
The main difference between a private label and a brand is ownership. Private label products are manufactured by a third-party manufacturer and sold under the retailer’s brand name. In contrast, branded products are owned and manufactured by a company that sells them under their own brand name.
Private label products are typically sold exclusively in the retailer’s store, while branded products may be sold in multiple stores or online. A retailer must have their own private label or partner with a reliable private label manufacturer to sell private label products. Successful private label brands can build customer loyalty and have a strong target market.
The four types of private labels are:
Own products: A retailer creates and sells their own branded products.
Store brands: A retailer offers products that are exclusively sold under their own brand name.
Private label lines: A retailer creates a line of products that are sold under a specific private label.
Niche markets: A retailer offers unique products that cater to a specific market segment.
Private labeling works by partnering with third-party manufacturers to create products that are sold exclusively under a particular brand or label. This allows retailers to sell products without needing in-house production or manufacturing facilities. The private label definition is the practice of branding products with a retailer’s own label or brand name, rather than the manufacturer’s.
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