Normally, store brand grocery can bring 5% more margin. How do we launch a store brand? It’s the real question that a major consulting firm answers for its client.
But before the how question, there is always why question which is 100 more important than how.
Is more margin the only objective? If it is, will launching store brand help you achieve the objective? The answer is not that clear.
The branded product that you are going to replace must not be too complex in terms of designing, manufacturing, and marketing. Have you seen store branded Coke, which is very complicated in marketing? On the other hand, in Staples, most of their paper products are store brand.
By replacing a branded “common” grocery product with store brand, what you can save is the product R&D if any, branding, marketing expense, but you probably rely the manufacture for product quality, and it’s your credibility on the line. You may need to pay more on logistics. No product stands still, how do keep your product updated? It still costs money.
Replacing a already cheap common product, there is not much room for error. Make sure you know what it takes before jump in.
Shenxin (Nicolas) Xu 