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What is Private Labeling?

Posted by Shelby Headley on Oct 26th 2022

What is Private Labeling?

Have you ever been to Target and seen the clothing brand, “A New Day” or the food brand, “Market Pantry”? Another example would be the “Great Value” brand at Walmart. These are what we refer to as private label brands or owned brands. Private labeling is when a retailer, in this case, Target or Walmart, gets a product produced by a third party but sells under its own brand name. They can customize the product, from specifications to features to packaging. Then, they will contract and pay the manufacturer to produce it. After, the retailer labels it with their brand and markets it. This process happens in a variety of industries, from retail to food to cosmetics.

Some of the benefits of private labeling include:

  • Production ownership- retailers have a direct business deal with the manufacturer, so they can control the design, the materials, and the quality of the finished goods
  • Profit margin- these products will not have branding costs of a national brand nor the middleman fee to bring the products to the stores
  • Flexibility- retailers can respond to customer’s expectations more promptly than if it was a larger brand/ large brands can come with determination deals with large manufacturers that can prevent them from having flexibility unless they pay a high amount for it
  • Branding- allows retailers to determine the style and design of the brand/ retailers can have a say in what they think their customers would like to see in the store
  • Expanded product line- can provide a “one-stop for everything” concept to consumers/ creates credibility and trust in customers’ eyes
  • Maximizing peak demand- companies can launch during peak seasons or special events to increase sales from higher market demand

You might wonder how Bubble Sip plays a role in private labeling. Well, we currently do private labeling for several car dealerships, like Toyota and BMW. We use our purified Blue Nile water and put the company we are doing private labeling for on the label. We have these companies on a shipment cycle and do great business with them. By using our own truck to deliver, we can guarantee that we will get the shipments delivered on time to the retailers. If this information interests you, please contact us at sales@bubblesipus.com, as we are always looking for new companies to do this partnership with!