Private labeling in beauty : What it is and how to spot the obvious

In the last three years, many rumors and conjecture have spawned over superfamous brands allegedly private-labeling their products, to the shock of many a beauty addict. But what is private-labeling and why are people mad about it?

A private label is simply a product not manufactured by the company’s own brand. Companies can typically ask a third-party manufacturer to formulate a product and produce a certain amount of stock with their own branding, but they can also just buy ready-to-sell stock with custom branding. They can shop around for formulas and customize packaging and colors, or reformulate or reverse-engineer existing products to be placed into their own packaging.

It might sound dubious to some, but private labeling is done in many industries (like supermarkets having their own brand of snacks under a different name, or hair salons releasing their own hair products) without necessarily being a detriment to the consumer. In fact, Euromonitor estimates that Private Label made up 0.3% of the market in Beauty and Personal Care, and 0.4% of the market in Mass Beauty and Personal Care in 2017. There are many reasons a company might turn to private labeling, such as reduced costs and liability, and it’s not automatically a bad thing to private label products.

Okay, cool but why are people mad about it?

Problems arise, of course, if the manufacturer has its own problems (say, formulation, safety, cleanliness), or if you feel “duped” by a brand (or two) who sell you the same exact thing at different prices. Here are some telltale signs that a product is actually the result of private labeling:

Two (or more) brands that carry the exact same product, packaging, just with different sticker labels

Ever seen two eyeshadow palettes that look exactly the same, except for the shade and brand names? It’s possible that the two companies bought from the same supplier, slapped their logos on the packaging, and called it a day. This might also be a sign that they purchased from a manufacturer with no minimum order quantity (MOQ), hence the “generic” formulation and packaging. The formulas aren’t terrible per se, but they’re also not original in any way, which makes competitive squabbles over “who released what first” kinda funny. This also applies to brushes, tools, and other beauty products.

A brand that goes around selling extremely close dupes of famous brands

A second benefit of private-labeling is the ability to reverse engineer existing formulas. Again, not necessarily bad (maybe they reverse engineer in-house) but still of note. Does the perfume smell exactly like a famous fragrance? Maybe the ingredients list from a famous brand is exactly the same as a Korean brand? Scour the internet first to check how similar the products really are because even slight variations in the formulation can have an impact on actual performance.


“Handmade” and “organic” cosmetics you can find at wholesalers, retailers, bazaars, etc.

Did you know that you can buy cosmetics (by the gallon!!!), label them as your own, and make a killing with incredibly cheap lip tints and clay blushes? Honestly, many reputable brands can and probably are doing this, though they may not be sourcing from random Facebook shops and produce at a much larger, more regulated, scale. The difference though is that the manufacturers they buy from can be held liable for their formulations, versus that random seller from Shopee who repackage the products by hand and without proper equipment and sanitation.

The bottom line is this: private labeling is not a bad practice in itself because it allows smaller brands to have products even with limited resources. Everybody has to start somewhere! But as consumers, it’s important to research about everything we intend to buy to avoid paying too much for the quality we’re getting (or even for zero quality). Google is our best friend!


Sources:

Brand Shares of Beauty and Personal Care, % Share (Local Brand Name) - Retail Value RSP -2017, Euromonitor Beauty and Personal Care in the Philippines Country Report May 2018

Brand Shares of Mass Beauty and Personal Care, % Share (LBN) - Retail Value RSP – 2017, Euromonitor Mass Beauty and Personal Care in the Philippines Country Report May 2018