Have you ever wondered why so many beauty products are identical in everything – colour, texture, finish, performance, etc – bar the packaging and the price? That’s because they are the same product, but sold by different brands. How is that possible? Private label.
I first found out about private label a few years ago, when lots of small mineral makeup brands kept popping up left, right, and center. There was a new one every week, all offering big, but identical, ranges of products. But even traditional cosmetic brands often use private label. And the pratice is by no way limited to the beauty industry. Food, fashion, and technology brands, to name a few examples, repackage and resell private label products too.
So, what is private label?
Private label beauty companies, such as Lady Burd and Grafton Cosmetics, create their own range of cosmetics, which they then sell to third parties who slap their logos on them and resell them as their own. Private label is very popular because it allows anyone to create their own beauty brands at an affordable price, while keeping the costs down and maintaining good profit margins.
But if brands love private labels, consumers don’t. Customers like buying from people who put thought, effort, and creativity into developing their own line. When they use private label, instead, brands have no control over the formula or the ingredients, but only on the packaging and the final price of the product. A lot of people think that’s dishonest.
Personally, I believe that it is unethical and dishonest for a company to sell private label cosmetics without admitting to it. Or worse, even claiming they have created the products themselves. That’s one of the reasons why I don’t buy from Lime Crime. It’s not cool.
On the other hand, though, starting a cosmetic company is very expensive, and most people simply don’t have that kind of capital at their disposal to make their dreams come true. Susan Chyi certainly didn’t when, at 19, she started Jelly Pong Pong. So, she used private label stuff for a while, focusing all her creativity on the packaging instead, until her company grew enough to allow her to formulate her own products.
I don’t have a problem with that. On the contrary, Jelly Pong Pong is not the only brand that started this way, so image what the beauty world would have missed if private label didn’t exist! But if you’re thinking of starting your business and going down this route, then you must a) be honest with your customers about it, b) not charge too much for them, and c) start formulating your own products as soon as you are able to do so. Otherwise, it’s just cheating.
What are your thoughts on private label cosmetics?