eli5, how do “store brands” work?

Question

eli5, how do “store brands” work?

In: 348

Answer 1

LG makes televisions; they also sell a lot of their components to other manufacturers to make their televisions. This is called OEM.

A store contracts LG to make televisions for them, often using less sophisticated components they may have used on previous generations of LG televisions, or OEM components. LG manufactures the televisions, slaps the store’s branding on them (called private label), sells them to the store for slightly less than shelf price.