What is a private label agreement?
A private label agreement is a type of contract that allows a company to buy products or services with a so-called “white label” directly from the manufacturer, to then resell it by putting their own label, i.e. their brand.
The private label agreement is an essential tool both for the companies who produce and for those who buy private label products, not only among the major retailers.
In the Italian industrial and manufacturing panorama it becomes an important vehicle for the diffusion of high quality products all over the world, which become more competitive also thanks to the minimization of marketing costs. The private label contract also allows companies with a stronger brand identity to reach lower market segments, as in the case of the basic product lines of supermarket chains, while still ensuring a quality product.
Its structure also offers flexibility to companies, especially start-ups or small companies, who want to invest more in the image of their product, without quantities, security certifications and time constraints, and who prefer to limit investments in research and development and risks associated with manufacturing contracts.
LCA has gained experience in private label contracts by assisting industrial companies to sell their on- labelled products in Europe.