Where margins are tight and competition is fierce, the decision to stock established brands or invest in private label products has become a defining strategy for many retailers. Each path offers unique advantages — and real challenges.
At Cohere Commerce, we analyze retailer feedback from across the country to understand how products perform once they hit the shelves. This blog breaks down what’s really driving retailer decisions when choosing between private label and name-brand products.
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Why Retailers Choose Established Brands
Despite the growing popularity of private label, established brands continue to dominate shelves in many stores — and for good reasons:
1. Brand Recognition Drives Foot Traffic
Name brands come with built-in awareness. Consumers recognize and trust them, which means less time spent educating shoppers and more confidence at the point of sale.
2. Support Infrastructure
Established brands often provide marketing collateral, seasonal promotions, product training, and merchandising kits. This support can help retailers drive faster sell-through with less internal effort.
3. Reliable Supply Chains
Larger brands typically offer consistent inventory availability and more streamlined logistics, which is especially critical during peak seasons or promotional events.
However, these benefits can come with trade-offs: lower profit margins, limited flexibility in terms, and minimum order requirements that can be restrictive for smaller or newer retailers.
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Why Private Label Is on the Rise
Private label — products branded by the retailer but manufactured by a third party — is gaining traction as store owners look to boost margins and create unique offerings.
1. Higher Profit Margins
Without brand markups, private label products often provide better margins. Retailers can reinvest those earnings into other areas like customer acquisition, staff training, or store upgrades.
2. Exclusive Products, Stronger Identity
Private label allows retailers to offer something that can’t be found elsewhere. This helps build brand loyalty and gives stores more control over the product story, design, and packaging.
3. Agility and Innovation
Retailers using private label can quickly respond to trends or customer preferences, testing new products in smaller batches and iterating faster than traditional suppliers.
Still, private label comes with operational challenges: managing quality control, navigating supplier relationships, and handling all product education and marketing independently.
What’s Actually Driving the Choice
Based on retailer behavior across the Cohere Commerce platform, here are the leading factors influencing whether retailers lean toward private label or stick with name brands:
Factor | Established Brands | Private Label |
Customer Trust | High | Requires education |
Profit Margins | Often lower | Often higher |
Marketing Support | Provided by brand | Fully retailer-owned |
Supply Chain Reliability | More consistent | Can be variable |
Brand Control | Limited | Full control |
Product Differentiation | Competes in open market | Exclusive to store |
Speed to Market | Slower, dependent on brand cycles | Faster, retailer-driven |
Many Retailers Are Choosing Both
Rather than picking one route, many retailers are strategically blending both approaches:
- Established brands are used to attract new customers and reinforce store credibility.
- Private label lines are introduced to increase profit margins and differentiate the product mix.
This hybrid strategy allows stores to balance reliability and recognition with innovation and exclusivity.
Conclusion: It’s About Fit, Not a Formula
There’s no universal answer. The best approach depends on your store’s goals, customer base, and operational capacity. What’s essential is making informed decisions backed by peer insights — not assumptions or guesswork.
At Cohere Commerce, we make that easy by giving you access to verified, real-world performance data on the brands you’re considering. Whether you’re building your own line or stocking established labels, see how other retailers are navigating the same decisions — and what’s actually working in stores like yours.
👉 Explore brand performance insights on Cohere Commerce.