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To mangle a line from Shakespeare, it turns into a black-and-white evaluation of to-be or not-to-be a private-label distributor. That’s a mistake. There are many ways to manage a private-label brand strategy, at many levels. Consider it carefully and don’t summarily dismiss making private label a part of your mix.
To be sure, it takes a strategic plan, talent and investment to be successful. But the payoff can be powerful in higher profit, building your own brand and having your own part numbers. It can be a huge competitive advantage.
The best place to see the power of private label in action is in a grocery aisle. Supermarkets were the early adopters. They started with generic black-and-white packaging. This “no-name” approach was eventually replaced by “me-too” products, where for example the store would put their laundry detergent in an orange-colored package. The packaging was strangely close to a Tide’s color scheme to leverage that powerful brand.
Today top supermarkets have more than 25 percent of their sales in private label brands. They have developed strong stand-alone brands like Kirkland at Costco. The store brand is its own brand. Just type “Is Kirkland Vodka Actually Grey Goose?” in Google, and you will see some vigorous online debate that really showcases the power of a great private brand.
What happens in retail eventually finds its way into wholesale. That’s why today we’re seeing increasing numbers of distributors making private-label programs a key part of their market strategy.
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