twelfth · Glossary · Category management
Own label
Also called private label, house brand
Own label is product a retailer brands and sells itself, also called private label or a house brand, and usually made for it by a contract manufacturer.
What it means for retail and category teams
Own-label ranges are often tiered: a value tier, a mainstream tier positioned against national brands, and a premium tier. The retailer controls the specification, price and packaging, and usually earns more margin per unit than on a comparable branded line. The trade-off is that own label takes shelf space and promotional slots a national brand would otherwise hold, and the retailer carries the product risk.
Why it matters
Own label shapes how shoppers read the price ladder in a category and how much leverage the retailer has with brand suppliers. Launched with a clear shopper and tier in mind, it can lift category margin; launched without one, it can cannibalise a branded line and leave the category no better off.
Illustrative example
The business and figures are illustrative, not customer data
A grocer plans a premium own-label olive oil priced between the leading brand and a specialist import, expecting most buyers to trade up from its mainstream tier. After eight weeks, the new line's sales are split roughly evenly between shoppers trading up and shoppers leaving the brand. Both routes earn the retailer more margin per bottle than before, so the line stays.
Related terms
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