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What are private distributor brands?

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Quick Answer

A private distributor brand is a brand that is owned and distributed by a reseller without displaying the manufacturer's identity. Private label brands are used by retailers and wholesalers to maximize their profit margins and to offer lower prices. Private label brands compete directly with similar manufacturer brands.

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Full Answer

Private label brands are cheaper than manufacturer brands and have become popular within the United States and across the globe, as of 2014. This has forced some manufacturer brands to cut their prices in order to compete with similar private label brands.

Manufacturers often take action against distributors within their network who start offering private label brands, as they become direct selling competitors. Such actions should include withdrawal of support for the distributor. A manufacturer should prioritize relationships with distributors who have taken a solid stand against offering private label brands, as he can trust such distributors. He should have alternative distribution options in case he terminates distributors offering private label products.

A manufacturer can fight private label brands by understanding his final consumers and targeting them directly. This ensures that such consumers remain loyal to the brand in the face of competing private label brands. Developing breakthrough products and relationships solidifies a manufacturers relationship with his distributors and builds a brand's equity and endurance.

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