Inventory glossary
What is Private label?
Private label is a product made by a manufacturer and sold under the store's own brand name instead of the maker's brand.
Private label lets a small store control pricing, packaging and quality instead of competing on price with other sellers of the same item. It usually means higher margin per unit, but it also means the store owner carries all the forecasting and reorder risk since the product cannot be bought elsewhere by customers if it runs out.
Because private label items often have longer lead times and minimum order quantities set by the manufacturer, owners need to plan purchase orders further ahead than they would for off-the-shelf branded goods. Tracking sales per SKU closely matters more here, since a stockout on a private label hero product cannot be patched by ordering from a different supplier overnight.
Example
A candle store sells a "Harbor & Pine" candle made by a contract manufacturer and labeled with the store's own branding. The manufacturer requires a minimum order of 500 units per scent and takes 6 weeks to produce and ship. If the store sells 20 units a day, that 6 week lead time means it must reorder once stock drops to about 840 units (20 x 42 days) to avoid running out.
Common mistakes
- Ordering the same small batch size used for branded resale items, ignoring the manufacturer's minimum order quantity.
- Not building in extra lead time buffer, since private label production often takes longer than restocking a branded product.
- Treating private label SKUs the same as easily replaceable items when they are actually harder to backfill if they sell out.
Private label and SteadyShelf
SteadyShelf can forecast demand for private label SKUs and flag the order-by date based on each manufacturer's lead time so the store reorders before running out.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related terms
Minimum order quantity · Lead time · Contract manufacturer · White label · Hero SKU
FAQ
Is private label the same as white label?
No. Private label products are made specifically for one store's brand, often with custom formulas or designs. White label products are generic items made once and sold under many different store brands with little or no customization.
Why does private label usually need more safety stock?
Because the product can only be reordered from one manufacturer with a fixed lead time and minimum order quantity. There is no alternate supplier to call if stock runs low unexpectedly, so stores keep more buffer stock to cover that risk.
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