3 Reasons Why Private Snack Labels Have Higher Margins

Private label brands are products that are manufactured and sold by the company that makes them. They’re usually positioned as lower-cost alternatives to national or name brands. Retailers earn a 35% gross margin on store-branded products while nationally advertised brands earn only 26% gross margin. They usually earn higher profit margins because your store is the exclusive carrier of those products, customers are loyal, and there’s always the potential to earn additional income when other retailers carry your brands.

Why Sell Private Labels?

1) They’re exclusive

Private label branding is a great way to distinguish yourself from your competition. Since you’re selling in your store, you have the right to be the exclusive product there. In other words, you create demand for that product and you’re your customer’s only source for it. Thus, you can set the price point, and as long as consumers really want it, they’ll pay whatever you charge.

2) Customers are loyal

When people like your product, they’ll feel attached to your label and they’ll want every other product with your label on it. Because you’re the only store that sells it, they’ll feel like they’re among an elite group of consumers with access to it, furthering their desire to buy it. And each time they use the product, they’ll be reminded to go back to your store to buy more.

3) You have potential for wholesale income

As your products become more popular and demand for them increases, you could become a wholesaler for them and offer access to other retailers who are willing to pay premium acquisition costs for the right to carry your products. Not only can you generate more income this way, but you also gain more exposure to new customer bases. Demand for your products will increase even more and consumers will be drawn to even more of your products.

Are you looking to add private labels to your inventory line-up?

In addition to higher margins, private-label brands allow you to respond to consumer demand and trends and control the price point. You can also have greater control over production and marketing. For more information on how Mister Snacks can help you provide your customers with snacks that will keep them coming back for more, contact our team today.