Own Label Brands Explained
- Created: Saturday, 04 June 2016 18:11
- Last Updated: Monday, 16 January 2017 14:46
- Hits: 13018
Own Label Brands
Just what is an own brand label and are you getting cheated if you buy one?
Almost every day we see people that have bought an own label appliance from a retailer completely unaware and unsuspecting that the brand is not a brand that is its own entity but is actually one owned by the retailer or, people that have bought a kitchen full of appliances find the same thing out about all the machines they have had fitted with the kitchen.
Then there are “real” producers that will market their products under different brands with minor changes to the look or features to make them just a little different from one another but, under the skin, they are largely the same.
For each we need to look at the differences between each so as you can might understand the reasons behind why this is and why producers and retailers do this and what the impact is for you should you buy one of these products.
We could write a book on these capers but while this is a large article it’s not all of it, just the bits you ought to really know about. And, why you should care.
Are you really buying a machine from the people you think and who's name is on the front of the machine? Or are you buying some hunk of junk dressed up to be something it is not?
Reading this article could save you money or save you from making an expensive mistake!
Rebranded - The Movie
We got so much hassle over talking about this topic that we decied to take the stance that, if nobody is doing anything wrong, it's all legit, above board and so on that really, nobody should have a problem with it.
Seems we may be wrong. Some still ain't happy at all that we talk openly about this subject.
So we decided that if it was ruffling that many feathers, we'd make it into a movie as well, just for kicks.
This gives you the highlights and where we're coming from but, there is a lot more info in this article and throughout the website than just in this video but, you'll get the point...
Box Of Chocolates
Like our familiar friend over there on the right famously said, branded appliances make many of these brands just like Forrest’s observation on life, you just never know what you’re gonna get.
This is more the case than ever when it comes to brands that don’t make a single product of their own, all they do is sell stuff that is made for them by others.
Almost all will tell you that they’re different etc but the reality is, it’s like ordering from any catalogue in that sure, you can choose some things but, not too much and a factory is not going to dramatically alter what they do for a small brand owner that buys a few score containers a year. They may give an exclusive look or door shape but, that’s about it normally unless you buy huge amounts.
But the thing is, as they don’t make the product you don’t know who did, what it’s like, whether you can get parts or service and often if it was even a good buy or not.
Like a box of chocolates, you just don’t know what you’re going to get.
This is fairly straightforward for the most part and generally a lot of people will get most of this and perhaps may already know most of it, few will know all the reasons.
The primary reason manufacturers appear to go down this road is to move upmarket increase market share or increase margins by selling lesser products at higher prices.
For the appliance industry where, in the developed countries of Europe, North America, Australasia and so forth the market is saturated and stagnant with close to zero product innovation, buying up the competition is one way to “grow”. In short, it’s an easy way to buy market share, just buy out the competitors and there you have it, some corporate guy gets a big fat bonus for the effort and winning X% more market.
It is of course false way to increase market share and in our opinion anyway, most probably not in the interest of consumers but, it is all perfectly legit and legal.
The outcome of this however is that often people will buy Brand X as they know and trust the brand but what they actually end up with is Brand A with absolutely no idea or indication that this is the case.
Most of the smaller brands or regional makers have been swallowed into massive global companies now or, in effect, been put out of business by them.
Even really clever people often don’t know so, don’t feel too bad if you feel you were duped in this way.
The big negatives here are that, in the appliance industry at least, there are actually very few producers but, hundreds of brand names. This stifles competition and innovation is liable to stagnate. New entrants to the market cannot compete as they cannot get the scale of volume to compete. Regional brands are no more, they’re dead, it’s all pretty much global businesses now.
The top five appliance producers in many markets will likely control 80-90% of the market, if not more. In some, two companies control 80%.
All around, this probably isn’t good news for customers.
For more on how actual appliance producers and known brands work on this front please see the sister article to this one all about manufacturer rebranded products for more on how you can save over £1000 in some cases.
Here we are looking at your A-typical high street or online retailers, not kitchen sellers.
In the UK it used to be a two horse race between Currys and Comet.
Comet died off spectacularly some time ago and Appliances Online (AO, that used to be DRL) appear to have taken their place. But the rise of Argos and others probably didn’t exactly help Comet as they moved into selling large appliances as well all the other stuff Comet sold.
Comet had their own brands, Proline, Scandinova and a clutch of others as well as some exclusive to them brands, the point being, this is nothing new they’re all been at this for years.
Currys has Essentials, Logik, Sandstrom and others as well as exclusive products.
Argos has Bush, probably more.
Asda has Russell Hobbs.
John Lewis has John Lewis and exclusive products.
You get the idea, they all do this to one degree or another apparently with the exception of AO who, at least at the time of writing, did not appear to have it’s own brand but, they probably will eventually and we do believe they have exclusive products.
Okay so you get that but do you know why they do this?
As is the norm with this site we’re not doing the happy-clappy PR’d rose tinted view of things, you will get this straight up.
It’s to con you, the customer.
Sure the various PR departments will spout some manure about it being all about the customer and products tailored to their customers individual needs or suchlike and, that’s complete horse manure.
They do it so they have more control over the products they sell, you cannot go and price compare against other retailers so, you have no clue whether it’s good or bad value really and for their own kudos.
They might even get to the bonus round where the brand actually ends up worth something and they can flog it off to some other company or, it makes a stock valuation look better.
If you think for one minute that this is being done to help the customer, you’re dreaming.
In a good many cases what you’ll get with a lot of these made up brands is some hunk of junk dressed up to at least look the part. You could probably buy the same product considerably cheaper as a “value” brand elsewhere, it just might look a little different.
Lower Prices Than Anywhere Else
“Lowest prices”, “price crash”, “cheapest”, “never knowingly undersold” we’ve all seen them splattered in stores, newspapers, online and everywhere imaginable.
They are all tripe. Utter tripe just to fool you, the poor customer that has to wade through all that garbage into thinking you got a good deal.
How can we say that with such confidence, easy.
If you can’t compare like for like products or if they are exclusive to that one sole retailer then of course they will be the cheapest or never knowingly undersold. Because nobody else has that exact same product. That is the only reason.
So, it’s all garbage.
The marketing people that dream this rubbish up are masterful at selling and convincing you to buy from them and trust us, they’re way better at that than most people will ever be at sussing out the trash they often talk.
You’ll be told you’re safe, you’re getting a good deal, you’ll get superior service and a host of other stuff. Most of it is often nonsense as all too often all you are doing is buying the same mechanicals with a different name or spin on them. Often spares and service will be supplied by the same third party as many others so, no different at all.
Almost always the same old stuff, just a slightly altered flavour.
Same Thing Only Different
Many of the products you see when you look at a bank of machines in store or pages of them in an on or offline catalogue are the same.
They don’t look the same, very deliberately but beneath the skin they are exactly the same thing in much the same way that you will probably be aware that a number of cars use the same chassis, engines, running gear and so on yet have a different body and interior to make them look different to the sibling.
You can buy one washing machine for example for £200 and pay £250 for the exact same guts just with a different facia and door, maybe a few other bits.
Surprisingly a lot of people are shocked by this but now you know from this expose that there are only a few manufacturers yet scores of brands, it shouldn’t be a surprise.
Same thing with exclusive models, they are merely tweaked versions of stock machines.
The reason for this is largely production costs as you see, the huge commercial moulds, stamps and presses to make washing machine casings, tubs, drums and all the main components that the manufacturers actually do make cost a lot of money. Like, in the hundreds’s of thousands lots. They sure aren’t going to spend hundreds of thousands buying moulds then goodness knows how much on top of that making a few machines for Mr Retailers to sell through a few containers in the UK alone. That just ain’t gonna happen.
If you look really carefully you can see any number of appliances are all just clones of each other or more accurately, slight variations on a basic setup.
Because there is absolutely no legal requirement to state who made it, in large part where or who even owns the brand this is all completely legit and legal.
For buyers, it’s a nightmare.
The most people go looking at machines they will have absolutely not the first clue that this is the case and, apart from on this site and perhaps a couple of others, nobody in the press or media seems to tell anyone or care.
You might think that this is designed to rip people off and we may even agree on occasion but it is a case of caveat emptor, buyer beware. One of the reasons we urge people to research what they are buying and from who.
As we said, the machines that are made to be exclusive for a retailer are merely tweaked versions of a bog standard machine so, for example, an exclusive Beko model you see in John Lewis is exactly the same, with exactly the same service and parts as all the other Beko’s. All it will have is a bigger door, an extra button or whatever. In any event it’s a minor change.
It doesn’t stop there though as you will see a number of exclusive machines in independent retailers in a bid to offer the retailers something “unique” (ha!) to sell that the large retailers don’t have access to. Normally these are limited to the large buying groups like CIH or Sirius et all but, not always.
Then it goes up a gear.
On occasion you will see brands that are exclusive to a large retailer or a buying group but it’s actually owned by a pukka manufacturer.
Sorry Beko but Blomberg is a cracking example of this.
Blomberg, which was a German manufacturer in the distant past, was bought by Brandt, who were then bought by Fagor, who then sold it to Arcelik, the parent company of Beko.
Now we see Blomberg branded machines in independent retailers stores and the brand is exclusive to them, we are not 100% sure but pretty sure it’s actually exclusive to CIH members. CIH is Combined Independent Holdings, a buying group of independent retailers.
So that group can sell an exclusive “German” brand, Blomberg and compete with the large retailers and multiples with a better warranty, different design and so on.
In the end however, it’s just a Beko in fancy dress.
When you see many of the scores of brand names that manufacturers have, this is sometimes the reason that they bother to buy them, so that they can offer select groups of their customers in various territories “exclusive” branding that is known by the general public, at least to some degree or another in order to promote better sales that you would likely achieve with a totally unknown brand.
Recently we’ve even seen retailers like Argos with Bush, Asda with Russell Hobs, GUS with Swan and more buying up their own brand names to achieve exactly that but to still have the freedom to buy and badge up whatever products they want from wherever they choose.
Most times when we come across this all it does is confuse and confound people as, they do not understand it.
Same deal here as above largely but sometimes the motives change a little.
Kitchen sellers want to flog you a kitchen and that’s usually going to be a good few thousand pounds. On every bit of that they will make a margin and they can use unique products to increase that a little.
See if they sell you a clutch of machines for lets say £2000 and they are making 10% on that number then they’ve just bumped their profit on the sale by £200. Now, £200 isn’t a huge amount of money on the £2000 for sure and for many retailers probably not worth the bother but, if you’re a big retailer and you do that on 5000 kitchens a year then it’s an additional £200,000 a year. Nice easy work as your fitters are probably going to have to fit the things to the customer’s new kitchen anyway.
The next issue the retailer has is, how to ensure that they sell as much of their own stuff or, any stuff as they can to get that extra on their sales?
Well, one way is to offer you surprisingly good deals to entice you take it or, offer you a free oven, hob and hood or dishwasher (whatever) on the proviso you take the deal and the rest of the products etc you get put in front of you.
You then weigh it up based on the company reputation, the goods, the service thus far and either jump at the deal or don’t.
Keep in mind here that in our example the retailer has £200 extra margin here to play with so, can come down a bit to close the sale. If they are forced.
Let’s change that up to a more realistic scenario though will we.
Let’s look at our £2000 worth of appliances and lets say that this is the total RRP for an oven, hob, hood, dishwasher, washing machine, fridge and freezer, all fitted. The flavour they come in is irrelevant here.
Now let’s imagine that what Mr Big Retailer is doing is buying the machines at least one container load at a time from Turkey and China, as cheap as possible but to *look* as good as possible, they want the machines to look like they’re worth £2000, doesn’t mean that they are. And, to most untrained eyes they probably will look as good as the more desireable and funky Smeg or AEG stuff etc.
So let us now give you ball park numbers for each of those as we listed them above where the retailer is doing this buy low, sell high thing.
- Oven - £100-150
- Hob - £40-80
- Hood - £20-140
- Dishwasher - £70-150
- Washing Machine - £150-250
- Fridge - £100-150
- Freezer - £100-150
Please understand that of course, all these figures are completely made up, no basis in fact whatsoever. Honest. ;)
Best case you are actually being sold about £1100 worth of actual product and a whopping margin for the retailer at £2000 or, you’re being ripped off if you ask us. You got a bunch of cheap rubbish for the same money you could get at least halfway decent products for.
If you then go further you can see how this could prove extremely lucrative on 5000 kitchens, it’s not just a couple of hundred thousand pounds a year, its many hundreds of thousands possibly into the millions. For the retailer, this is very worthwhile.
We will also point out that those margins, high street and small independent dealers selling proper branded goods can only dream about, they’ve not a chance of getting anywhere near that as quite simply they face more competition and price scrutiny online etc.
Further on we will explain why this is really bad for you.
You can get more about this sort of appliance from our article on buying integrated appliances.
You will also find that most of these own labels don’t sound like “Value” or “Cheap”, no way, not a chance.
The same marketing people we talked about earlier well, they come up with names that invoke trust or that make you think the product is German, Swedish or something like that so you are drawn to think that it’s a quality product at a bargain price. It isn’t.
Same old story, if it seems to good to be true, it almost certainly will be.
These people want you to think that you are buying some bit of glorious engineering excellence from a long standing brand or manufacturer at a knock down price, that’s the game here. When really what you're getting is a cut price Chinese junker a lot of the time.
This is a very deliberate tactic, make no mistake about it, it's designed to perhaps not trick you but to lull you into a false sense of security maybe.
So we highlight this so you don’t fall into this trap in articles such as what is in a name and the entire manufacturer section as well as parts listings and on top of that all the free advice you can get in the forums.
If you read this then fall for this tactic, it’s on you.
If you got stung then found this, sorry you didn’t find this information in advance it would have saved you a heap of hassle most probably and likely money as well.
Where Does It Come From
This is where things get interesting as if you are sharp enough you should be sitting wondering why manufacturers would produce for large retailers under a brand they don’t own.
Back to production volume we go.
You see the factories that pump these products out need huge volumes to be sustainable and to be able to buy in components in sufficient quantity to get the inbound prices of components and materials low enough to support the low in-store prices and to maximise profitability. So, if they can take on a bit of volume making for Mr Kitchen Retailer or Mr High Street here and there then, they get more volume, they lower their own costs and the world’s a happier place for them.
Then there are numerous manufacturers that don’t sell in the UK (or wherever) so to grab a bit of the action in another market with no requirement to set up offices, support, logistics, storage, employ staff or meet local legislation requirements is very attractive. On top of that they bump the volume and lower costs. It’s like being offered free money and who wouldn’t take free money?
Plus, if the producer has no responsibility for any of that or providing any support at all then they can of course do all this at a knockdown price.
If we have a fictional range of products under the brand of say “Live Better” kitchen appliances sold by Mr Retailer you will usually find that, in our kitchen retailer example above, two or three of the products will be from one supplier, the rest scattered or from two or three others depending on who offered what and when. Making it the case that all too often not all the “Live Better” machines in your kitchen, even if they have the same “Live Better” name stamped on them where made by the same company, or in the same country or even on the same continent.
Most buyers have no clue. They only look at the price.
Now the retailer has a problem, if they bring in all these products and there’s no service setup in the country of destination how do they get that done?
Well for the likes of Currys in the UK that’s okay, they have their own employed engineers presently that can solve the problem as well as all the infrastructure to go along with that.
Most anyone else, doesn’t.
Once again being blunt, most of them wouldn’t have the first clue where to even begin with service or spare parts and often probably don’t want to either. But the problem is still there and they need to find an answer to it.
The only options available to Mr Retailer are, setup some sort of service themselves or, contract the whole lot out to someone that does that. Unsurprisingly, most do the latter.
Whether its a case of they can’t be bothered with it or it’s cheaper or whatever else doesn’t really matter, it’s what they do. This is why that most of these types of products you will get service from a local subcontracted repairer on branded products and, often they don’t much care for them, the brand or the retailer.
You may be thinking, “Woah, what, they don’t care but they get paid to do that work”. Don’t worry, commercial clients don’t get this either.
Sure, they do get paid to repair them but what allegiance have they got to the brand, what allegiance will the brand show them? That service call on your “Live Better” machine is one or two calls a month maybe, why should the repairers give a monkey about it? How much effort are they going to put in to come to your home, drag a machine out, work out what’s wrong, fix it or order parts and come back and repeat that for about a £40-60 flat fee?
Let’s just leave it at, don’t expect stellar levels of service because you probably won’t get that.
Retailers looking to have their own brands serviced that happen across this article, best take notes.
Then you have the issue of technical support, which usually will be non-existent for a brand like this and the cherry on top being spare parts, the bit we see all day long.
Okay, here’s the bit we know an awful lot about, probably more than most even other proper parts suppliers, not those that play at it and we really could write a book here but, we’ll keep it as brief as we can.
It is not even remotely uncommon for some idiot in a retailer or whatever to order up machines from a factory and not to bother to get any spare parts at all or any information on them or to even secure a supply route to spare parts. We say idiot because if they do this, that is exactly what they are, idiots. They haven’t done their job properly and should be fired.
How do you support the machines even in warranty if you do not have any parts or any way to get parts? How do you explain to your customers that they either won’t be getting a machine repaired or that they may have to wait weeks or even months for a part?
When they do this, for us, it just shows either how stupid they are or how much they don’t care about their customers. It is idiocy.
We won’t name names but let us say that this is easily demonstrable across multiple brands sold in the UK by large retailers and kitchen retailers. Not even slightly uncommon.
This, as we alluded to above, gives problems on service because if the repairers or parts suppliers like us go searching and cannot find any information on the product, what parts are in it, where to get them and so on then we just give up. Frankly, for the few pounds we might make selling that part it’s not worth the time and effort searching and all the more so when you know up front you will probably fail. So, what’s the point?
This for end users, customers or owners is not a happy place to be.
Having to swap out a machine that may even only be a few years old just because you can’t get a control knob or whatever is just madness.
The upside is that a lot of these brands will buy the products from the same place so, if you’re a bit clever about it you can often source parts a lot cheaper from other sources. As we’ve stressed to people all through this site, that’s part of the reason we encourage you to ask about parts and not assume as, we will try to cross reference for you and we will give you any options or alternatives that are available. This can often save you a considerable amount of cash on parts.
You can find a more in depth article on why parts and service matter also available in this section.
Research Before You Buy
If you have managed to get all the way through this huge article well done but with any luck you will now understand what a minefield that this industry is for buyers.
We don’t sell appliances so, we don’t much care if we upset retailers all that much, many don’t like us anyway due to the advice we hand out for free. They apparently do not like their little secrets and tricks being exposed. We can’t think why.
If you are looking to buy new appliances then you get loads of information in general on most brands sold in the UK and many outside good old Blighty in the manufacturer section of the site, it’s packed with useful information.
If that doesn’t get you the information that you need then please feel free to use the forums for even more help, often even down to specific model numbers.
We will leave you with a bit of a warning though, sorry about this, if you don’t do your homework up front and buy smart then who’s to blame?
Inventing a productDear Sir/Madam
I would like to invent a kitchen product and would love to know the steps I need to take to get in touch with the Cookworks Company. I look forward to hearing from you soon.
Products will be predominately made by Vestel or Termikel.
Support is limited.
range cooker and american fridge freezercan you help me i need a new cooker and fridge freezer since coming across you i now have doubts on the ones i have short listed as they seem to be own brands
i dont want to end up throwing money away on manufacturers wh o dont care if there is a problem ive done that with indesit washing machine and tumble dryer that could have mad e my son who is blind and myself homeless
You would probably be better to ask in the forums where the guys will try to help you and they have more knowledge on who makes what exact models.