The Advantages of Private Label Branding

Private label brands are products developed and sold by the company that makes them. This generally includes retailers who sell their own branded products in lieu of, or in addition to, those acquired from other vendors. Private label branding has several important advantages as a business approach.

Private label brands typically have significantly higher profit margins than resale products. This is because the cost basis for making your own products is usually much lower. This is especially true if you do a good job developing and marketing products of high quality that demand good prices in the marketplace. Supermarkets routinely use private labels to fetch strong profit margins that offset minimal gains on top industry brands with high costs of acquisition.

Private label branding is one way to separate yourself from competitors. One of the greatest attributes of private labels is that you inherently have an exclusive right to sell the products. If you market the brand well and create demand for it, you benefit as your customers' only source. This contributes to your ability to charge premium prices, and you attract more customers who buy additional items when in your stores. Fashion retailer Buckle, for instance, has its branded "BKE" jeans but also sells many other clothing brands.

Building a loyal customer base is central to long-term business success. Private label branding is one way to build customer loyalty from people who like your products. High quality brands with limited accessibility to a large customer base help you gain loyalty from core customers. Your customers feel attached to your brand and like the feeling that they are among the select few who own it. This is especially true with high-end brands like Dolce & Gabbana.

As an alternative to exclusivity, or in addition to it, you could operate as a wholesaler of your brands and offer limited access to other retailers who pay you premium acquisition costs for the right to carry your brand. This not only generates more income, but it also spreads the exposure of your brands even further. A relationship with a high volume reseller can lead to more customers buying your brands. Oakley sunglasses are available directly from the company and through a number of other retailers.