Launching a private label clothing brand1 allows you to control design, branding, and pricing. With the right approach, you can build a unique identity in the competitive fashion market.
To create your private label clothing brand, define your niche2, partner with reliable manufacturers, and focus on quality and branding. Develop a clear pricing strategy and distribution plan.
Starting a private label can be challenging but rewarding. Let’s dive deeper into the key steps and important considerations.
How do you price a private label?
Pricing a private label involves calculating cost of goods sold (COGS)3, market research, and setting margins to ensure profitability. Striking a balance between affordability and quality is key.
To price a private label, calculate the cost of goods sold, add a markup based on market trends, and consider your target audience’s purchasing power.
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Steps to price your private label
- Calculate COGS: Include manufacturing, packaging, and shipping costs.
- Set Profit Margins: Typically, a 50-100% markup ensures profitability while remaining competitive.
- Research the Market: Analyze competitor prices for similar products.
- Understand Your Customer: Determine what your target audience is willing to pay.
Factor | Example Calculation | |
---|---|---|
Manufacturing | $5.00 | |
Packaging | $1.00 | |
Shipping | $2.00 | |
COGS Total | $8.00 | |
Markup (100%) | $8.00 | |
Selling Price | $16.00 |
Pricing should reflect the value of your brand while remaining competitive in your niche.
What are the 4 types of private labels?
Private labels are categorized based on their branding, pricing, and target markets. The four main types are premium, generic, copycat, and value-innovative private labels.
The four types of private labels include premium (high-end), generic (no-frills), copycat (replicas of leading brands), and value-innovative (unique offerings at competitive prices).
Understanding private label categories
Type | Characteristics | Example |
---|---|---|
Premium | High quality, luxury branding | Kirkland Signature at Costco |
Generic | Basic, unbranded, low-cost | Generic pharmacy items |
Copycat | Mimics popular brands, cheaper | Store-brand cereals |
Value-Innovative | Unique features, affordable pricing | Trader Joe’s products |
Choosing the right type depends on your target market and brand positioning.
What is a private label brand also called?
A private label brand is also known as a store brand or own brand. It’s sold exclusively by the retailer that owns the brand.
Private label brands, also called store brands, are manufactured by third parties but marketed and sold under a retailer's name. Learn more about store brand vs private label4.
Other terms for private label brands
- House Brand: Reflects the retailer’s ownership, such as Target’s "Good & Gather."
- White Label: Generic products that are rebranded by retailers.
- Own Label: A brand name unique to a specific retailer, like Walmart’s "Great Value."
These terms emphasize the retailer’s control over the brand's identity and exclusivity.
Where do store brand items come from?
Store brand items are typically produced by third-party manufacturers that specialize in contract manufacturing5. Retailers collaborate with these manufacturers to customize products to their specifications.
Store brand items are sourced from third-party manufacturers, who produce goods based on the retailer's branding and quality requirements.
The origins of store-brand items
- Contract Manufacturing: Retailers outsource production to specialized factories.
- Global Sourcing: Products are often made in countries like China, India, and Vietnam due to cost advantages.
- Quality Oversight: Retailers oversee production to ensure consistency and adherence to brand standards.
For example, private label clothing for a brand like H&M might come from a factory in Bangladesh, tailored to their specific designs.
Conclusion
Creating your private label clothing brand involves understanding pricing, selecting the right type of private label, and collaborating with manufacturers. With a clear strategy, you can build a successful brand tailored to your vision and market needs.
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Discover essential steps for designing, branding, and marketing your own clothing line. ↩
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Find methods to identify target demographics and style focus for specialized apparel lines. ↩
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Learn how to accurately price items by factoring in manufacturing, shipping, and packaging. ↩
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Understand how private-label goods differ from branded or national-label products. ↩
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Explore how retailers and designers partner with factories to produce exclusive apparel lines. ↩