White labelling, private labelling, and re-labelling are common practices in the packaging industry today. The terms are used to refer to the process by which a product is manufactured by one company but then packaged and labelled under another brand. You’re probably already very familiar with many of these products. Whenever you purchase a store-brand (such as Costco brand or Walmart brand), many of these products are actually produced by another company. Let’s take a closer look at re-labelling in packaging, how it works, and some of the benefits.
Re-labelling allows a company to expand their brand image by selling a diversity of products and services without many of the costs associated with manufacturing and distribution. Though the terms white labelling, private labelling, and re-labelling are often used interchangeably, the practices are sometimes a little different. Most specifically, white labelling often refers to re-labelling of services, most often in the software industry. Private labelling is usually in reference to re-labelling of goods.
No matter the product or service, re-labelling allows a retailer to develop a range of items for sale in their store. During the re-labelling process, the retailer must specify their expectations for the product including the type of packaging and the style of the label. Re-labelling is not only popular in the grocery and retail industry, but hair salons, restaurants, and even cleaning companies can benefit from re-labelling products to fortify their brand image and generate sales income.
Indeed, re-labelling is common across consumer products from food products including beverages, snack items, condiments, and frozen foods to personal care products, paper products, cosmetics, and more. As you can see, the potential for re-labelling is massive and the industry is certainly growing. While estimates suggest about 15% of grocery sales are represented by re-labelled products, these numbers are rising.
There are many benefits to re-labelling for retailers, not the least of which is increased brand presence. And even though you think you may be sacrificing product quality control, retailers and manufacturers both benefit from a solid relationship that ensures that re-labelled products meet the most stringent quality standards. Additionally, re-labelling allows retailers to determine product costs and pricing while also adapting to market changes. In fact, even small business owners can benefit from re-labelling by responding to market trends for new products. Finally, effective branding strategies are such that re-labelling allows retailers to easily position their products as either premium products or low-cost, quality alternatives to common brand names. The flexibility of re-labelling gives retailers a lot of options when selling products.
Re-labelling is a common practice that is becoming increasingly popular. When you consider the impact on sales figures as well as positive brand image, it should come as no surprise that re-labelling is a smart business decision.