Private Label Quietly Continues to Grow

While not much has been publicly said about private labeling / corporate brands (one distributor’s euphemism for this sourcing strategy), a number of large, European-influenced companies continue to develop their product offerings. And with margins being squeezed, operating costs increasing and manufacturers increasing their minimum order sizes, it’s a safe bet that this approach to sourcing as a means of improving profitability will continue to influence the market.

The question becomes, how much will it influence the market?

Adam Fein has asked us to contribute an article on private labeling for NAW’s upcoming Outlook 2009, which is an updated on the 2006 Facing the Forces of Change book. As you know we did much research on this last year and wrote an 8 article series for Electrical Wholesaling, and continue to do research on this trend, but we’d appreciate your help. If you could share your insights on:

• What is going on in your market?
• How has it impacted your business?
• How do you / would you compete against private labeling?
• Do you see this as a growth arena for distributors – will more do? Or will it be confined to larger companies?
• What are your thoughts about companies that support these endeavors?
• How should manufacturers compete?
• How can marketing groups help their distributors compete in enhanced product sourcing and profitability?
• What happens if all national chains get involved and private labeling creates a “haves” vs. “have nots” for product sourcing and a profitability benefit to chains?

And any other thoughts. Feel free to post your thoughts on www.electricaltrends.com, anonomously if you like; email us at dgordon@channelmkt.com or allen@allenray.com or give us a call. Your help is greatly appreciated and will enable us to make the chapter more timely and relevant for all (and no names need to be shared).

Interested in who the European players are who are leading the charge? Rexel, City Electric (which has a number of operating company names), and Hagemeyer (which soon will be a Sonepar company).