Private label meaning: how it works, advantages and risks for importers

THURSDAY, 22 OCTOBER 2026

A product made by a third party and sold under your own brand: how private label works, how big it is in Europe (38.8% share in 2025) and why whoever adds the brand is liable as manufacturer.

Private label meaning: a product made by a third-party manufacturer and sold under the brand of the company that markets it. Whoever puts their name on the pack does not own the factory, but chooses the product, sets its specifications and answers for it to customers and authorities.

The term comes from grocery retail, where it is called a store brand or retailer brand: the yogurt or the detergent carrying the supermarket's name. Today businesses of every size use it too, selling online, in shops or to their own business customers: supplements, cosmetics, homeware, promotional products, small appliances. This guide explains how it works, how big the market is, how it differs from other manufacturing models, what advantages it offers and which risks are worth knowing before signing an order.

Private label meaning: what it really is

Literally, a private label is a private tag. In practice it describes a relationship with three elements: a manufacturer that owns the technology and the line, a product that is already developed or can be adapted with few changes, and a company that buys it and sells it under its own brand. The end customer only sees that last name.

In Italian the terms marchio privato, marca commerciale and, in food retail, marca del distributore (MDD) are also used. In English, besides private label, white label and own brand are common. The nuances vary by industry, but the idea is the same: the brand belongs to the seller, the production to someone else.

How private label works step by step

The typical path starts from the manufacturer's catalogue. The company picks an existing item, asks for samples, assesses quality and decides what to customise: logo, colours, packaging, instructions, sometimes a formula or a material. Then price, minimum order quantity and lead times are agreed, a final sample is approved and production starts.

The stages can be summed up as follows:

• Choice of product and supplier, checking production capacity and certifications.
• Sampling and approval of a reference sample signed by both parties.
• Label and packaging artwork, with the mandatory wording for the market of sale.
• Production order with minimum quantity, unit price and delivery date written into the contract.
• Quality control before shipment, transport and customs clearance.

How big private label is in Italy and Europe

In Italian grocery retail, store brands hold a stable and growing share. According to figures presented in January 2026 at the MARCA fair in Bologna, Italian sales of retailer-brand products reached about 31.5 billion euros in 2025, 6.8% more than the year before (TEHA estimate for the Italian modern retail association ADM). Over the same period the value share in the omnichannel perimeter, measured by Circana, rose to 30.4%; in traditional modern retail alone it is around 23%.

Italy remains below other European markets. According to NielsenIQ data published by PLMA, the international private label manufacturers association, in 2025 private label held a 38.8% share across the 17 European countries monitored, with sales above 387 billion euros; Switzerland is the only market above 50%, at 52.3%. These numbers cover fast-moving consumer goods, not every sector: they do show, however, that European shoppers are used to buying products under a brand other than the manufacturer's.

Private label, OEM and ODM: the differences

The three terms describe how much design work stays with the client. In OEM the client brings the design and the manufacturer builds it to specification. In ODM the manufacturer offers its own design, which the client adapts. In private label the starting point is an existing product, usually with changes limited to brand, packaging and details; that is why it is the fastest model. The full comparison between OEM and ODM is covered in a dedicated guide.

The practical consequence is that with private label the same item can be sold by several brands. If the goal is a truly exclusive product, more development work and therefore a different model is needed.

Advantages of private label

The first advantage is time: starting from a proven product skips design, prototypes and basic testing, and gets to market in weeks or a few months instead of a year. The second is cost: there are no moulds or tooling to pay for in full, and minimum quantities are often lower than for custom production.

The third advantage is margin. Selling under your own brand means controlling the price and not depending on another brand's commercial policy. Finally there is the value of the name: a consistent line of products under the same brand strengthens the company's recognition and customer loyalty, as the growth of store brands in grocery spending shows.

Risks and duties: whoever adds the brand is responsible for the product

The point many underestimate is liability. The EU General Product Safety Regulation (EU 2023/988, GPSR), applicable since 13 December 2024, also treats as manufacturer anyone who has a product designed or manufactured and markets it under their own name or trademark. In other words, a company importing a private label item from China takes on the manufacturer's obligations, not just the importer's.

This leads to concrete duties: assessing the product's safety, keeping technical documentation, showing the name or trademark and a contact address on the product or its packaging. For items subject to CE marking, sector rules apply on top. Other risks are commercial rather than legal: a supplier selling the same item to a competitor, quality slipping from one batch to the next, an unregistered trademark that someone else files first.

A practical private label example with numbers

Hypothetical example. An Italian company wants to launch a line of insulated bottles under its own brand. In China it finds a stainless steel model already in production, at 4.20 euros per unit ex works for 1,000 units, with a laser-engraved logo and printed box for 0.60 euros more.

The starting cost is therefore 4,800 euros. Added to this, again hypothetically, are 300 euros for sampling, 350 euros for a pre-shipment inspection, about 900 euros of groupage freight to the warehouse, plus import duty and VAT calculated on the declared value. With a total cost around 6.80 euros per unit and a selling price of 19.90 euros, the gross margin stays wide even after sales fees. The same product developed from scratch would have needed a dedicated mould and months more before the first order.

How to launch a private label line without mistakes

It pays to start with a few items, check the supplier on site or through an inspection, and have a reference sample approved that becomes the standard for later batches. The contract should set specifications, tolerances, ownership of the artwork and a ban on using the client's brand on other supplies. The trademark should be registered before it is printed on packaging, and the compliance file gathered before shipment, not after the goods reach customs.

With La Merce a private label line starts with the signed reference sample, the inspection before departure and the file the GPSR requires from whoever puts their brand on the product, so the company sells under its own name knowing exactly what it has bought.

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