Salon Information

Private Label Costs Less

Written by David Kenney

Tanning is much like any other industry. There are several major producers/manufacturers of industry products. These producers wholesale their products to industry distribution outlets and the outlets wholesale their accumulated products to Salon Owners.

To maximize revenue streams the producers sell their products in two ways.

1) They sell under their own brand names. They advertise and support that brand name to build brand awareness and separate themselves from other market competition.

2) They sell under private label brand names. These private label brands are like products which have been contracted for purchase in bulk by a third party.

The private label and producer brands come off the same production line but are packaged or labelled according to that purchasers guidelines.

Often I see chatrooms banter that private label products and manufacturer brand name products are not the same.

Nothing could be further from the truth.

If you go into any of the major retailers like Target and Walmart you will see major brand products being sold as Target or Walmart brand. To figure out who made the Walmart detergent, for example, one need only compare the origination and ingredient data to a couple of the majors and you will know who private labelled it.

So why are private label goods less expensive?

They have to be to get any traction in the marketplace because

1) They receive no manufacturer support advertising

2) No brand support via manufacturers established brand

3) Less market reach due to limited supply chain

Why would a producer sell their top quality products via private label?

Simple, they make the same or in most cases MORE selling private label in bulk. So if you sell tanning lamps as an example. Clearly they are not running 60 versions of a 100 watt non-reflector. The cost to re-engineer the production line would not offset the material cost reduction.

In other words. It costs more for them to produce additional SKU's versus just taking existing SKU's and private labelling them.

So, the next time somebody wants to sell you their brand of tanning lamps which is a 100 watt F71 UVB rating 6% country of origin Hungary. You can have confidence to know that it is one SKU being produced by that company so you are reduced to price. Because be it Name Brand or label A, B or C it really doesn't matter. It's all about price.