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Repricing for Branded VS Private Label Sellers

by Cardy Chung
15 Oct 2021
While repricing tools offer different repricing methods, how do you know which one best suits your needs? One of the ways to decide the strategy that will work best for you is taking a look at your inventory. More specifically, knowing the difference between branded and private label is essential for deciding which repricing strategy will deliver the best results.

What does branded seller mean?

There are two kinds of branded seller, one that manufactures and sells products under their own brand name (You are Nikon selling Nikon); one that buys and sells other brands’ products under the respective brands’ name that does not belong to them (You are BestBuy selling Nikon). The first one is simple, say Nikon sells its D5600 camera on Amazon. It is a branded seller because the Nikon D5600 is produced and sold under the same brand – Nikon.

Another possible scenario is where a reseller buys and sells Nikon products on Amazon. That person is also a branded seller because the camera sold is still labelled under the Nikon brand name. Consumers that bought the camera recognized Nikon as the name brand where the retailer is simply regarded as a middle-man shipping them the item.

What does private label seller mean?

A private label seller refers to people that sell products not made or manufactured by them, but still labelled under their own brand name. For instance, a retailer could partner with a manufacturer to buy and sell cameras under a chosen brand name, eg. Morgan CAM (a made-up name). As the cameras are sold under the retailer’s own brand name (Morgan CAM in this example), he or she is a private label seller.

Although the seller doesn’t make their own products, they still privatised it with their own brand label, hence the word ‘private-label’! The private label seller will decide every element that represents the brand including packaging, labelling, products type, etc. Customers that bought the cameras recognised Morgan CAM regardless of where it was made.

Why does it matter for Repricing?

One obvious difference between branded and private label sellers is competition.

For branded sellers there is a direct competition among multiple sellers of the same brand. Using the same example, two different retailers selling the same Nikon camera may set different prices. From the consumers standpoint, the same brand means the same product, quality or features, thus price is now the only deciding factor. In this case, whoever offers the best price wins the sale. Competitors are also easily identifiable – those that sell the same product model of the same brand. Therefore, branded sellers on Amazon are most recommended to use competitor-based repricing.

On the other hand, private label sellers don’t have direct competition with other sellers. As you are the only seller of your own brand, price is just one of many factors for consumers when deciding if they should buy your product. Using the same example again, a Morgan CAM camera will not be regarded by consumers as having the same product quality or features offered by a Nikon camera. They are both cameras but they do not compete solely on price, given that both offerings are not identical. Hence, you could set a price much higher and still win sales because there are other factors of your brand that stand out. In this case, competitor-based repricing may not be an optimal choice because there is no direct price competition. Therefore, private label sellers on Amazon are most recommended to use velocity-based repricing.

ABOUT THE AUTHOR

Cardy Chung is the founder of StreetPricer. Read more articles by Cardy Chung.

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