What is a white label?

The white label catalogs the line of generic products manufactured by a distributor (which is usually a supermarket), which sells to end consumers under its name or brand.

The private label are few recognized products, with packaging and simple design. Another of the main characteristics of this type of product is that the price and quality of the products is much lower than the rest of the products on the market. White label products tend to differentiate themselves for this reason, since in times of crisis it has been the perfect solution for those who could not buy products at a low price.

An example of a white label is Hacendado, from the popular Mercadona supermarket in Spain. The recognized product of a cola would be Coca-Cola, although the Hacendado brand presents its line of cola at a lower price.

Despite what is thought, private labels have managed to survive in the market and have evolved to a much greater concept than originally thought. Now, the designs and packaging are more presentable and cared for, and the quality and price of the products have become fully competitive unlike the rest of the products on offer.

Private brands are now called own or distributor brands and have a high competitiveness, especially against recognized brands in the market.

Advantages of private labels

Among the benefits of private labels we can find:

  • Distributors gain in consumer loyalty and greater bargaining power from their Suppliers. Also, if the products are good they could earn a higher profit margin.
  • Consumers see the price of products reduced, in addition to finding a greater variety.
  • The manufacturer can reduce its production costs by taking advantage of economies of scale due to increased demand

Disadvantages of private labels

But not all are advantages, we also find some disadvantages such as:

  • Increased costs and management risks for the distributors of the new brand and its catalog.
  • If distributors exercise market power, final prices for consumers can be increased.
  • For the manufacturer there is a greater dependence on the demand of the distributor.

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