The Benefits of Private Label

The days of private labels being viewed as generic and lower quality are gone. In fact, there are many successful stores that base their business models almost entirely off of private label brands. Stores like Trader Joe’s, Aldi, and your major grocery stores have really started to change the perception of private labels from being generic, lower quality products, to actually convincing people that store brands can often be superior to the name brand.

Private label sales have continued to grow over the years. According to Statista, in 2020, the market share of private label brands in the United States was 19.5 percent. This is very encouraging news for retailers that either have a private label brand or are considering getting one.

If you don’t already have a private label, there are many benefits to having a private label. Let’s take a look at a few.

Unique to Your Store

Whether you choose to use your own logo on your private label or create a house brand that can only be found in your store that doesn’t necessarily brand your store (i.e. Great Value, Kirkland, etc.) you are going to create loyalty to those particular house brands. Once people experience your private label brand and know they are only available at your store, it will definitely create a sense of loyalty to your store.

Brand Exposure

If you get customers hooked on your private label products, it’s like having a billboard placed in someone’s home. Every day when they consume your private label product, they see your logo (or your house brand name) and immediately think of you. When they start running low on that product, they are reminded instantly of where they got it.

Price Competitive

Private label products tend to have higher margins than name brands. So you can sell for cheaper prices than name brands and still get a similar margin to that of your name brands. It’s a win for the customer and for you!

Supporting Local

Nowadays, people prefer locally made products, and if they love your private labeled products, they would want more. And while your private label brand may be manufactured somewhere else in the country, there is something to be said about having a local store “produce” their own products and put their name on it. One thing you can also do is put a “local” tag on your shelf to help customers easily locate local items on the shelf.

Ease of Access

There are so many incredible private label manufacturers in our industry. From food and beverages, to cosmetics, to supplements, to sports nutrition there are suppliers for everything that are incredibly reputable and offer very high quality products. Once you determine what your customers are seeking as far as the products they want you to provide, you can find multiple manufacturers to choose from.

Before You Jump In

These are just a few of the many benefits of private labeling. While there are always cons to every situation and things to be mindful of when you start (doing your market research, asking tough questions of suppliers, etc.) it is definitely worth considering having some private label brands on your shelves.

If you have questions about how to get started, please contact the office. We have contacts across the industry that we can connect you to.

SENPA

SENPA is a non-profit organization with a core focus on strengthening the success of independent natural retailers and aligned manufacturers, while nourishing their human connection with consumers. We are a leading voice, supporter and advocate for the natural-products industry, rooted in the experience of enhanced health and the power of personal relationships.

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