According to Business Encyclopedia: A private label product is manufactured by a contract or third-party manufacturer and sold under a retailer’s brand name. As the retailer, you specify everything about the product – what goes in it, how it’s packaged, what the label looks like – and pay to have it produced and delivered to your store. This is in contrast to buying products from other companies with their brand names on them.
Advantages: control over production, control over pricing, adaptability, control over branding and profitability
Disadvantages: manufacturing dependency and difficulty building loyalty
Note: Private labeling can also be for services that a company offers from a third-party manufacturer or supplier i.e. internet services, business systems, etc.
The picture shows a company with a private label line. For more information use this link.
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Gary Heisey Founder and Brand Strategist with Brand Door