White label vs. private labels

These 2 buzz words have being doing rounds lately in the media and surprisingly very few know exactly what they mean. So I am summarizing and demystifying these terms for my lazy friends who don’t have time to read the wiki pages for them.

White Label: As the name suggests, these are unbranded products designed and developed by a manufacturer who does not have a retail connection. As the name hints, the brand/label portion is left empty in for the purchaser who would then retail it as part of its own brand offering. Most Chinese goods are white-labels because they are sold under a more popular European/American brand/logo. Technically speaking, white goods manufacturer are not subcontractors but guys who conceive, design and manufacture the goods. However this distinction is fading and many sub-contractors (those who manufacture based on client’s design & requirements) also project themselves are white label manufacturer.

Private Labels: These are retail chain’s own brands/products which are neither widely advertised nor are retailed elsewhere. The store sells them usually at a discount (to keep customers happy), while it has extra margins because it bypasses the branding and marketing costs incurred by P&G, Unilevers, Pepsi and Coke of the world. The retail chain typically bulk orders them (often overseas) from a white-goods manufacturer, put on its own logo and sells it at its retail outlet (often showing price comparisons against the popular brands)

Remember, although all private labels almost exclusively use white-label goods, not all white label goods are sold as private labels.

 

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