SOLUTIONS OUTLOOK
MAKE IT YOUR OWN The advantages of offering your own brand of OTC products
C
ostco has Kirkland; Walmart, Great Value; Target, Good & Gather.
retailers to funnel purchases to their products. The retailer controls
Think of any major retailer and fill in the blank. They all have
the positioning, the in-store marketing, and the prices of those
their own private brands, which span categories: household goods,
products—meaning they have all the means to direct shoppers to
apparel, pharmaceuticals, health and beauty.
their brand over the competitors. Moreover, consumers who trust
If there’s a unanimous trend among the large chain retailers
the retailer are likely to trust their brand.
across industries, there are probably good reasons. Costco’s
Kirkland Signature brand is worth $40 billion, Walmart’s Great
independent retailers are getting in on the trend, including
Though this practice is seen at major corporations, some
Value $27 billion, and Kroger’s private brands $23 billion. Store
pharmacies. Whit Moose, owner of Moose Pharmacy in North
brands account for more than a quarter of many of these retailers’
Carolina, had noticed a lot of demand for probiotics, but he wasn’t
total sales.
satisfied with the quality of the available brands and generics.
At the same time, he had been thinking of ways to promote his
In a recent poll, 63 percent of American consumers said they
plan on buying more private label goods in the future. According
pharmacy. That’s when he had the idea to invest in his own line of
to CB Insights, a technology data platform, private label sales are
high-quality probiotics, branded with his pharmacy’s logo. "When
poised to account for a quarter of all sales for packaged goods in a
patients go home and take their vitamins or supplements, that's
few years.
our name and our logo they see when they open that bottle every
day," he said. "Just the name recognition part of it is huge."
Store brands are often a product of "white labeling," which
is the process of purchasing goods from a manufacturer and
branding them with your own label. These products are referred
Moose’s strategy was ahead of the curve. In the past, private labels
Looking at the current landscape of store-branded products,
to as private label, store brand, or owned brand. For example,
were seen as inferior but much more affordable than their brand
Walmart, Target, and Amazon all get their acetaminophen from
peers. But now, store-branded products have grown into legitimate
the same manufacturer (Perrigo) but put their own brand's logo on
competitors in quality and variety while still winning the pricing battle.
their bottles.
than he makes selling generic versions. But he earns about the
On average, private labels earn margins 20 to 35 percent
higher than brand names. Creating a store brand also allows
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In general, Moose makes more money selling his own brand
same as the pharmaceutical-grade and name brands because of
