eli5, how do “store brands” work?

Question

eli5, how do “store brands” work?

In: 348

Answer 1

Often referred to as “white labelling”.

Manufacturer produces a product, for half they apply their own branding. The other half has another branding applied.

It’s sometimes more about volume of sales rather than price per unit.

I.e if Big Co beans sell for 90p a tin but CrappyMcCrap Beans sell for 50p that’s a huge gulf between the pricing but if CrappyMcCrap outsells Big Co Beans at a rate of 100-1 then its a tidy profit.

The benefits are, those people that have brand loyalty pay the extra but those on a budget get what they want and the manufacturer makes their money either way (as does the retailer).