Quick Answer: How Do Private Label Brands Work?

A private-label product is made by a third-party company but sold under a specific retailer’s brand.

According to the Private Label Manufacturers Association, “Private label market share has reached nearly 25 percent of unit sales in the U.S.

and is expanding faster than national brands.”

What is an example of a private label brand?

Private label brands (or own brand labels) are products sold by a retailer with its own packing, but manufactured by a third party. For example, Tesco sell ordinary branded items, such as Heinz baked beans, but also sell their own ‘Tesco Value’ baked beans.

How does private label work?

A private label product is manufactured by a contract or third-party manufacturer and sold under a retailer’s brand name. As the retailer, you specify everything about the product – what goes in it, how it’s packaged, what the label looks like – and pay to have it produced and delivered to your store.

How do you brand a private label?

Below are the steps to follow to help you start a successful private label from idea to launch.

  • Understand the costs of private labeling.
  • Choose the products you want to sell.
  • Define your target market.
  • Consider your differentiating factor.
  • Create your brand look.
  • Create an experience.
  • Find a supplier.
  • Build the brand.

Is private labeling illegal?

Private labeling has many benefits. You have not mentioned what kind of products you would like to private label but usually there is nothing illegal in private labeling as long as the manufacturer follows standard FDA manufacturing guidelines.