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A Detailed Guide on How to Create Private Label Products

Do you want to start a business by making your own white label products? If YES, here is a detailed guide on how to create your own private label products.

Private labels are seen as generic product offerings that competed with their national brand counterparts by means of a price – value proposition. Often the lower priced alternative to the main thing, private label or store brands carry the stigma of inferior quality and therefore, inspire less trust and confidence.

Store brands give a choice to the end consumer, while for the retailer it serves as a tool for leveraging business and winning customer loyalty. Retailers have understood that while consumers can buy a national brand anywhere; they can only buy their store brand at their store.

In better established markets, private labels were a result of economic necessity, to provide a cheap alternative for low-emotion involvement goods such as butter, eggs, flour and sugar. Also with the popularity of private labels increasing in Europe and the USA, now is a better time to start your own private label product brand.

Reports have it that retailers all over the globe have become more sophisticated and competitive, and the role of private labels in their stores, have changed from that of a price-fighter to being a value-added marketing differentiator.

It’s very important to state that changing consumer tastes and the need to fill a gap in product offering is the major reason for retailers to offer private label products. Note that this gap may be because of the non-availability of particular product/category. The retailer may also want to establish a competitive advantage in his domain by aiming to offer a product that is unique and thus, also build customer loyalty.

Have it in mind that offering a product or a range within a product, gives the customer newer reasons to visit the store every month or week, is something that every retailer looks forward to. You should also understand that private labels also allow the retailer to establish a brand which is associated with the store and therefore, with an experience.

A private label also attracts trendsetters and curious shoppers who want something different. It also gives you the opportunity to create a product that reflects your overall brand identity, and a product that differentiates your business from the competition.

A Detailed Guide on How to Create Private Label Products

There are two major types of private label products: Products that need to reflect or tie into an existing brand directly, and Products that have to stand on their own merit and name. You need to understand them to choose the path you believe will yield more results. There is no hard and fast rule for creating private labels as essentially you are creating a completely new brand.

a. Defining the Objective

Note that the very first step towards creating a private label begins by defining the reason you wish to create the private label. Indeed some common reasons for making a private label are the need to create a competitive differentiation, or to offer a wide and unique product range. Also note that the need to create a private label may also be for enhancing product margin and to build customer loyalty.

b. Understand the Gaps in the Market

After you must have defined your basic objective, you will also need to understand the customer segment which is to be tapped. This will help you have a further understanding of the target profile of the customer and also aid you to address issues with respect to the sensitivity of price on the target audience, the level of experimentation within the segment and the level of brand loyalty, if any.

Also another factor you need to look into at this stage is the financial implications of the private label. This will involve gaining an understanding of the financials that would be involved in creating the private label and the supply chain efficiencies that would be needed from the organization and the supplier, in case the product is outsourced.

c. Choose to Make or Buy and Source

At this point, you will have to decide the basic purpose for the creation of the private label, the method in which the sourcing of product is to be done. Have it in mind that this process will involve a decision on make or buy. If you decide to source the product, decisions with respect to the vendor or supplier needs to be tackled diligently.

You will also have to check the ability of the supplier to provide products within the given time frame, at the needed quality and price levels, so as to enable you earn a substantial amount as a margin. Also if the product is an apparel, it is very crucial that the designs and styles of the products are different from those available with other retailers and brands.

d. Create a working Marketing and Sales Strategy

The product, when secured has to be marketed within the store environment. This will involve communication within the store and at times, communication in vehicles of mass media.

e. Identify the Measures of Performance

When creating a private label, as with creating a brand, it is very important to identify the measure of performance. It is also important that you develop a system to track and monitor private label program performance and identify recommendations for program refinement and improvement.


The report which states that private-label penetration will have reached 50 percent by 2025 is based on assumptions about the food retail market structure. Have it in mind that the underlying drivers for private label growth are scattered over a number of trends/strategies. Also to further complicate matters, there is a strong inter-dependency between the growth factors.