Private labels—or store labels—are exclusive labels that a particular store owns. They are the packaging and brand names specific to a particular store. ... This carries the benefit of marketing a product to larger retailers to sell the product in the retailer's brand packaging, expanding reach and sales potential.
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Nike, for example, is a private label company. They buy bulk from a manufacturer, switch up a few things, put their name on it and sell it.
Successful private label brands will be able to create better sales opportunities for retailers. The customization of store brand labels -- such as to logos and tag lines -- can personalize a customer's shopping experience that can lead to higher customer loyalty.
Compared to reselling other brands or white label goods (other brands that a company rebrands as its own), creating a private label brand gives a company a greater profit margin as it can better manage the upfront costs of manufacturing and shipping, have better quality control, and charge more for the product.
A private label product is manufactured by a contract or third-party manufacturer and sold under a retailer's brand name. ... This is in contrast to buying products from other companies with their brand names on them.
Many retail stores have private label programs that they use to merchandise amongst the products they buy from manufacturers to increase their margins. ... Zara is an example of private label with internal product development.
Why do buyers add private brands to their merchandise mix? Private brands can only be found at that store. They add exclusivity to the product line. ... Sales for many licensed products drop off very quickly and sales can fall precipitously.
Private labels are one such tool to build competitive advantage through creating cost leadership. In building customer relationship, the Private labels provide a win-win solution. The retailers gain better bargaining power over their suppliers and better margins while the customers get a wider choice of prices.
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