How Private Labels Are Outselling Established Brands?

Jul 29

Without a doubt, private label brands are currently outshining the established brands out there. There’s so much hype around private label brands and well it makes sense as these brands are creating a new competitive dimension in the world of business.

What Is A Private Label Brand?

For those who don’t know, a private label brand is a brand that creates products that can be sold by third party sellers as their own. The reason why these brands are growing in number with each passing day is that they don’t have to market or brand any of their goods. These companies are solely focused on creating products and then selling them to third parties who can then sell further just the way they want. A private label company isn’t closely in contact with people, in fact, they just are in touch with the companies they are in business with.

Private Labels Vs Brands

There’s a huge difference between private labels and brands. Now if you want to market your business properly or are thinking about hiring an Amazon business broker, it’s important that you first understand the differences.

Here are the primary differences that you should know about;

Private label companies don’t invest in marketing or branding. On the other hand branded products are marketed and they invest heavily in branding too.
Private label companies make their profit by selling their products to other businesses whereas brands make their profit by margin revenue of their products.
Private labels only sell to other businesses whereas brands can sell their goods following the B2B or B2C business models.

Some Leading Private Label Brands

By now you probably do understand how private labels can help turn literally any brand profitable. With the help of a brand value accelerator, a brand can witness unimaginable success. Speaking of which, we are now going to talk about some of the most successful private label brands right now. Starting from;

1-Kirkland Signature

Kirkland is one of the best examples of private label brands. It’s a one widely recognized brand that sells high quality consumer products. The brand sells everything from grocery to hardware and even pet supplies.

2-Stone And Beam

Stone & Beam is another proof that private label brands are doing better than established brands right now. This private label company sells furniture goods including kitchenware, chairs and tables.

3-Presto

Even though Presto focuses only on products like toilet papers, detergents and paper towels, it’s still considered as one of the best private label brands with great sales.

4-Buttoned Down

Buttoned Down is a popular Amazon success. It’s basically a fashion brand that focuses on men’s wear. The main reason behind its popularity is that it’s a one affordable gift giving solution.

5-Great Value

Great Value is a private label brand by Walmart that mainly focuses on grocery items like mustard, snacks, beans and even popcorn.

These are some successful private label brands that are also a proof in the business world that private labels are outselling established brands.

Advantages Of Private Label Products

Retailers enjoy a great deal of benefits when using private label products;

They have complete control over the production. Private label brands work as per the directions of the retailers and they give them complete control even over the ingredients and the quality of the products.
One of the biggest benefits for retailers here is that they have complete control over pricing. They can determine the cost without being answerable to anyone and they can decide how much profit they want to make.
Lastly, what most people don’t know is that private labels take responsibility for the brand name and the packaging design demanded by the retailer.

Reasons Why You Should Private Label Your Brand

It’s an undeniable fact that with each passing day, the business world is becoming more and more competitive. If your sole purpose is to build yourself a successful business with higher profit margins and less hassle then it’s high time that you think about private labeling your brand.

Here are some reasons why you need to take this step as soon as possible;

1-Higher Profit Margins

As said earlier, private label companies end up with higher profit margins and it makes sense because they don’t have to spend extra on branding and marketing. If you run a business, you’ll have to worry about a lot of expenses including the ones you require to build yourself a loyal customer base. Then comes the expense of creating product designs, working on marketing campaigns and then of course branding. Now with private label brands, there’s no such hassle. You can easily use the private label brand of your retailer.

2-Excellent Market Stability

Even if the economy is down, private label brands remain stable mainly because of the lower price points. Private labeling your brand can work wonders for you especially because you’ll enjoy stability in quality, consistency and most importantly affordability. In fact, private label brands become more popular when the times are tough as they receive more orders from retailers in such times.

3-Lower Operating Costs

When it comes to private label products, you don’t have to worry about marketing them as they sell themselves. Overall the operating cost here is quite less because private labels receive bulk orders from retailers. This saves the manufacturer a lot of money as he has to ship the bulk order to only one retailer. In simpler words, the lower operating cost here is one major reason why you should think about turning your brand into a private label.

Conclusion

Now that you know what a private label brand is and how it works, it’ll be easier for you to understand why these brands are doing way better than the established ones. At the end of the day, if you want to succeed in the business world, you have to play smart and private labeling your brand at the right time is a smart move that’ll benefit you a lot in the long run.