# Own label

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.

Also called: private label, house brand

- **Is:** Product the retailer brands and sells itself, also called private label or house brand.
- **Earns:** Usually more margin per unit, and control of the category's price ladder.
- **Watch for:** A launch with no clear tier or shopper, which only cannibalises a brand.

## 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. None of it is customer data.

A grocer launches a premium own-label olive oil priced between the leading brand and a specialist import, expecting most buyers to trade up from its mainstream own label. After eight weeks it sells 300 bottles a week: 160 from shoppers trading up from mainstream own label and 140 from shoppers leaving the leading brand. The premium line earns $4.20 a bottle, against $2.60 for mainstream own label and $3.10 for the brand, so both routes earn more per bottle and the line stays.

**Where the premium olive oil's 300 weekly bottles came from**

- Traded up from mainstream own label: 160
- Switched from the leading brand: 140
- Result: Both routes earn more per bottle

Every source of the new line's volume earns the retailer more than the sale it replaced.

## Related concepts

- [Cannibalisation](https://twelfth.ai/glossary/cannibalisation)
- [Assortment](https://twelfth.ai/glossary/assortment)
- [Category captain](https://twelfth.ai/glossary/category-captain)
- [Price position](https://twelfth.ai/glossary/price-position)

## Next step

### Bring a range decision to a demo

Use a live decision from your category: a line to add, a promotion to assess or a range to review. We can show how the evidence and decision record fit together.

- [Book a demo](https://twelfth.ai/book-a-demo)
- [twelfth for grocery & convenience](https://twelfth.ai/industries/grocery): Continuous margin, cover and price monitoring across thousands of grocery lines, with recommendations ranked by commercial impact.

Source: https://twelfth.ai/glossary/own-label