Ecwid Ecommerce Glossary

Private Label

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What is private label?

Private labeling is selling products a company makes under another company’s or business’s brand.

Private label products are the products manufactured by one company for sale under another company’s brand. Private-label products are available in a wide range of industries and are often sold at a lower cost.

The advantages of private labeling:

  • a loyal customer base
  • high margins compared to reselling products
  • an opportunity to operate as a wholesaler for your brand
  • separating yourself from your competitors

The disadvantages of private labeling:

  • a requirement of minimum orders
  • a possibility of unsold inventory
  • customers often trust a brand they’ve used for a long time, as opposed to a little known private-label brand

To avoid the drawbacks of private labeling, do your research on customer preference before you invest in private-labeled products.

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