What is PRIVATE LABEL BRANDING?

Brand sponsored by a wholesaler, retailer, dealer, or merchant, as distinguished from a brand bearing the name of a manufacturer or producer; also called private brand. Manufacturers use either their own name, that of a middleman, or a combination of both when they are marketing their products. Private labeling occurs when middlemen, usually large retailers or wholesalers, develop their own brand. Since manufacturers' (producers') brands have large advertising expenditures built into their cost, a private labeler is able to buy the same goods at a lower cost and thus sell them at a lower price and/or at a better profit margin.

In addition, private labelers have more control over pricing and are able to advantageously display their own brands for maximum impact. For example, a grocery store can quickly reduce the price of its own private-label brand in order to meet or beat a competitor's price. Or the grocery store can create a special point-of-purchase advertising display and/or give its brand predominant shelf space in order to boost sales.

Private-label brands are usually priced lower than comparable manufacturers' brands and therefore appeal to bargain-conscious consumers. An example of a private-label brand would be a supermarket product bearing a store label with a product's name.