When you pick up goods at what is referred to as the end-market retailer, like your grocery store, seldom do you think about everything that formed part of the process that ensured you can indeed pick those goods up and go and pay for them. You very well might think along those lines, if you’re a regular, typical reader of platforms such as this one.
It makes for some very interesting consideration though, because it offers insight into the intricacies of modern day life, especially in relation to the different channels and approaches those goods and services you buy are brought to the end-user retailer market.
Companies such as Whole Foods and Walmart have benefited from selling private label products created by other manufacturers. Retail giants such as Walmart, Tesco, Whole Foods, and Target have been successful in selling branded merchandise made by third parties.
For example, the Whole Foods Markets “365 Everyday Value” product line. Most supermarket branded products are supplied by companies that sell them to multiple supermarkets, only changing the labels. Grocery stores sell their own branded cereals and other products at a discount compared to other brand names. For example, a set of generic products branded as Walgreens is sold only in Walgreens stores.
Private label, however, refers more to products that are manufactured and labeled before being sold exclusively to retailers. White-label products are generally sold by retailers under their business stickers, but the products themselves are manufactured by third parties. With white labelling, manufacturers can sell their products to any number of brands. Once a private label manufacturer agrees to sell a product to a brand, the brand can promote the product in any way it wishes.
Once a brand has chosen a product configuration and applied tags and labels to it, it becomes brand property. Foreign manufacturers use their own material to create products, but then label it with the buyer’s brand. It looks like the product was made by the buyer. A product/service is produced by one company, and another company (marketers) labels someone else’s product to make it look like it was created by them.
In contrast, drop shipping is when you buy a product from one manufacturer and resell it without affecting certain brands, while white labelling is when one manufacturer supplies standard products to multiple brands or retailers. The main difference is that white label products are distributed by the manufacturer to multiple retailers, which means that the products are the same, the only thing that differentiates them is the branding, packaging, and how they are sold. White-label services and white-label software are also popular, allowing companies to create their own branded packages based on existing solutions, but since they’re not typically sold on Amazon, today we’re talking about physical white-label products.
What approach would you take if you were seeking to get in on the pretty standard retailer goods and services market? You’d obviously just looking to win yourself a fair bit of market share, because we’re talking here about consumer goods that practically sell themselves.Infographic provided by Clover – industry benchmark Retail POS System