What is a 'Private Brand'
A brand placed on products that a large manufacturer has created for a smaller retailer. The smaller retailer places their own private brand label on the final good which was created by a third party manufacturer. Private branding is a cost effective way to gain access to producing a product without requiring a large manufacturing or design team.
Also known as private label.
BREAKING DOWN 'Private Brand'
Many private brands have seen success due to the flexibility in production and little capital required to start (no need to build manufacturing plants). For the manufacturer the benefit of selling private brands is the increased sales volume and stable supply contracts. There are risks associated with relying on an outside firm, but usually these firms are well established and specialize in producing the product.