eli5, how do “store brands” work?
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When it comes to apparel, it is rarely the manufacturer and store working together. It is usually an agent who is coordinating the private label program, and the cost savings is because there is zero advertising from the agent or factory side, it is all on the retailer to push brand. Retailers don’t want to buy directly from factories because they would have to do all the due diligence like making sure there is not slave or child labor, safety testing, etc. It is better for them to have a large agency partner who assumes most of that risk/liability. And also handles paying factory so retailer doesn’t have to pay for goods until after they are on shelf. Source: former sales rep for clothing companies that sold large national and regional retailers.
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