My fear about private brands
I am concerned about a continuing trend toward so called ‘private’ brands — both by independents and dealer ‘all-makes’ programs.
Users of this marketing tool are trying to make one of the following points as publicly as possible:
• We are offering our own alternate brands because national brands are application coverage or technologically insufficient; or,
• This new brand represents a way to beat the ‘marketing tax,’ those charges for advertising, cataloging, merchandising and training that neither the customer nor distributor needs or wants; or,
• We distributors (as the last mile link in the supply chain), deserve a greater cut of the margin pie; or,
• This label is the only way we can be sure you bought this from us in the first place when you want to return it; or,
Over 40 percent of Wal-Mart’s sales are store (private) label; part of the $65 Billion spent on private label products (PLP) in the U.S. last year.
Shouldn’t we be on the band wagon?
With the solid supply base we have in the heavy-duty aftermarket, with at least three national branders competing in each product segment, I frankly don’t get the need for an increasing number of alternate brands.
Several recent studies conclude that 50 percent of private brands are net losers from a distributor profitability perspective even though the store brands have higher margins built into their lower price.