← Business Models: Core (all topics)
Private label & own-brand penetration
What it is
Retailers and platforms selling own-brand merchandise alongside national brands, at gross margins materially above bought-in goods. E-commerce platforms extend it further by using the sales data of the brands they host to launch competing products
Private label share is the standard measure of how far a retailer has moved from distributing others' brands to owning demand itself
Impact on industries
- The principal margin lever in retail - the retailer captures the brand margin as well as the retail margin on the same shelf or page
- Own brands build customer loyalty to the retailer rather than to a supplier, which is what makes the relationship durable
- Platforms see exactly which styles, sizes and price points sell before launching private label, so brands hosted on them subsidise their own competitor
- It requires sourcing and inventory risk a pure distributor never carried; store-productivity metrics sit separately in the SSSG and ADS rows