A private label, or private label brand, is a business that focuses on creating products that third parties can sell as their own. They don’t need to market, brand, or retail their own products. The focus remains solely on manufacturing products and selling them to other companies who sell them to the end consumers. Most popular private label categories include personal care, cosmetics, beverages, frozen foods, household cleaners, and dairy items.
Many brands use private labeling to outsource product sourcing and manufacturing to a third party. The success of private label brands depends on a lot of factors, including
- Sourcing quality products
- Building strong customer relationships
- Building an engaging and memorable brand
Some of the most successful private label brands are Kirkland Signature, Presto, Happy Belly, etc.
Benefits of private label
- No need to worry about heavy marketing and retailing
- Allows companies having strong manufacturing capability to maximize their profits
- Gives control over pricing to ensure profitability
- Companies that don’t have finished products inventory can also sell end products
- Gives control over production and brand