, Retail
A delicatessen in Shropshire has been selling a Yorkshire chutney at £4.25 for six years, bought in at £2.40. A supplier offers to make the same recipe with the shop's name on the jar at £1.55, minimum order 600 units, four flavours, twelve week lead time.
At £4.25 that takes the margin from 44% to 64%. It also takes £3,720 out of the bank in one go, fills the stockroom with 2,400 jars, and makes the shop the legal producer of a food product for the first time in its history.
The margin is real and so is the cash it consumes
Own brand works because you are removing the brand owner's marketing budget and profit from the cost, not because the factory is cheaper. The same production line often makes both.
What you give up is flexibility. A branded line you buy a case at a time can be dropped next month. An own brand line arrives as a minimum order quantity set by the manufacturer's production run, and that quantity is set by their economics, not yours. Six hundred units of something that sells eight a week is eighteen months of stock sitting on your shelf and your balance sheet.
Work it out as cash rather than margin. Take the minimum order value, divide it by your expected weekly unit sales, and that is how long your money is tied up. Then ask whether the extra margin over that period beats what the same money would have done in faster-moving stock. A 20 point margin improvement on a line that turns twice a year is usually worse than 8 points on a line that turns twelve times.
There are other costs that do not appear on the quote. Artwork and design, which you pay for once and again every time the law changes. Plates or print set-up charges. Product testing and, for food, nutritional analysis and shelf life testing. Sample runs. And the first order of packaging, which frequently has its own minimum quantity larger than the product's.
Start with one or two lines that already sell well, where you know the demand, rather than with a range. A range is how you find out you have bought four flavours and the town only wants one.
Putting your name on it makes you the producer
This is the part that changes your legal position, and it is not widely understood.
Under section 2 of the Consumer Protection Act 1987, liability for damage caused by a defective product falls on the producer. It also falls on any person who, by putting their name on the product or using a trade mark or other distinguishing mark in relation to it, has held themselves out to be the producer. That is what an own brand label does.
The liability is strict. A claimant does not need to prove you were negligent, only that the product was defective and caused damage. Your recourse is against the manufacturer, which is worth exactly as much as their solvency and their insurance.
Three consequences follow. Your product liability insurance needs to be told, in writing, that you are now an own-brander, and the sum insured needs to reflect it. Your supply agreement needs an indemnity from the manufacturer and evidence of their product liability cover, checked annually rather than filed. And you need traceability: batch codes, records of which batch went into which delivery, and the ability to run a recall. The General Product Safety Regulations 2005 require producers to take action where a product is unsafe, which includes withdrawal and recall, and you cannot recall what you cannot trace.
For food, the same logic runs through food law. The food business operator whose name the food is marketed under carries the responsibility, which after the change is you, and your local authority environmental health team will treat you accordingly.
Labelling is not a design decision
Mandatory labelling requirements are set out in retained Regulation (EU) No 1169/2011 as it applies in Great Britain, with the Food Information Regulations 2014 providing enforcement. Northern Ireland follows the EU rules under the Windsor Framework, which matters if you sell into both.
For pre-packed food the mandatory particulars include the name of the food, a full ingredients list in descending order of weight, allergens emphasised within that list, quantitative ingredient declarations where an ingredient is highlighted, net quantity, a date of minimum durability or use by date, storage and use conditions, the name and address of the food business operator, country of origin where its absence would mislead, and a nutrition declaration. Since 1 October 2022, food sold in Great Britain must carry a UK address for the responsible business.
Get the small mechanics right too. Minimum font size rules apply to mandatory information. Average quantity rules under the Weights and Measures legislation govern the use of the estimated sign. If you are making health or nutrition claims, only authorised claims may be used, which rules out most of the phrases a designer will suggest.
Outside food, other regimes apply. UKCA marking replaced CE marking in Great Britain from 1 January 2021, though recognition of CE marking has been extended indefinitely for most product groups. Textiles need fibre composition labelling. Toys, electricals, cosmetics and candles each have their own rules, and each of them lands on the person whose name is on the box.
Registering the brand is worth doing before you print anything. A UK trade mark application through the Intellectual Property Office costs £170 for the first class and £50 for each additional class at the time of writing, which is cheap compared with rebranding a range because somebody else got there first. Check the register before you commit to a name.
What it builds, and what it costs you with your suppliers
The strategic argument is the one that survives a bad year. An own brand line cannot be price-checked against anybody. A customer who likes your own chutney cannot buy it in a supermarket for £3.20, which removes you from a comparison you cannot win.
It also changes what your shop is. A range of lines carrying your name turns a retailer into something closer to a brand, which shows up when you open a second site, when you sell online, and eventually when you sell the business, because a brand is an asset and a shop fit is not.
Against that, understand what it does to relationships. The brand you have just replicated will notice. Suppliers who have supported you with terms, promotions and point of sale material are less enthusiastic about a customer competing with them on their own shelf. Most sizeable retailers run both, but the smaller you are, the more one supplier's goodwill is worth to you.
And be honest about quality. Own brand that is visibly worse than the branded line it sits beside damages the name on the jar, which is now your name over the door.
Where this shows up in the game
Shops and food producers are part of Business Baron's full game, and e-commerce is free to run. Buying deeper for a better unit price ties up cash and shelf space in advance, which is the old choice between a cheap pallet and the cash it ties up. Putting your own name on a product makes that trade with a longer tail.