What is a private label?

When an eCommerce or retail uses a product made by a third party but under its own brand, packaging and corporate name, it is said that it is using a private label.

In some way, it is an opposing concept to that of retail arbitrage because, in this case, we buy from a maker and get involved in the product. Therefore, there is a bigger control of it. There is also an added advantage of having a cheap cost as it does not depend on original brand´s production process 

Private brands are also frequently found in supermarkets and food stores. 

This kind of stores often have products made by their own providers but under the chain´s brand, competing against the maker´s products directly, as they usually have a cheaper price. 

The main advantage of a private label is the fact of having a product that works in the market thanks to the experience of a maker that is involved in it. 

This does not mean we can get red of our own market researches; in fact, they are essential as we are provided with an idea of how successful our private label can be.  

Besides having a consolidated product in the market, we have the posibility of starting generating our own private label with its resulting branding.

When the time comes, we can diversify to another areas or, even, lead to an own production with an imperceptible change for customer.