Private Labeling — Offering Retailers A Competitive Edge
September 2012 Integrated Solutions For Retailers
By Bob Johns, associate editor
Retailers are turning to private labeling to increase margins — but not without risks.
Private labeling has emerged as an excellent opportunity for retailers to gain market share and increase margins when executed correctly. Here, Danika Manchester, strategic business development manager with SATO America, Inc., discusses the benefits and pitfalls of private labeling for retailers.
As more retailers look toward private label products to increase margins, what are the major concerns for maintaining inventory levels?
Manchester: Production, transit lead times, and forecasting. Private labels are normally sold through a single retailer, so they often require smaller production runs than a national brand would place. At the factory, larger runs often take priority over smaller ones. So, either the smaller job is moved down on the schedule, or the buyers are forced to look for another factory. Factories with capacity are often located more inland and further from ports, so savings in production lead time may be offset by increased land transit time to get the merchandise to the airport or cargo vessel.