# What is Private Label?

What is Private Label? Selling externally manufactured products under your own brand. The supplier manufactures, you brand and sell.

## How it works in practice

Private label is the 'next step' for successful dropshippers. Selling a product via dropshipping that's working? Move it to private label: an MOQ of 200-500 units, margin rises from 15% to 45-60%, and you start building a real brand that's hard to copy.

## Related metrics

- Dropshipping — the stage before private label
- White Label — private label = white label + a brand asset
- Gross Margin — private label means far higher margin
- Brand Building — private label = building a brand asset

## Common misconception

'Private label = low quality.' That's an outdated stigma. Amazon Basics, Kirkland (Costco), Trader Joe's — all high-quality private labels. Private-label quality depends on the spec you give your supplier. Bad private label = a bad spec.

## How to fix it

Private label not succeeding? (1) Check product-market fit before going private label — did the dropshipping version work? (2) Check MOQ — don't order over 200 units on the first run, (3) Check quality control — sample every shipment, (4) Check differentiation — private label identical to a competitor means a price war.

## Real-world example

Gadget seller: dropshipping earbud cases at 12% margin. Moved to private label: MOQ 300 units, branded packaging, a short manual. Margin: 54%. Six months later: private label = 40% of sales, overall margin rose from 18% to 31%.

## Where to start

Private label makes sense when you have: (1) a proven dropshipping version (100+ sales), (2) cash flow for the MOQ, (3) dropshipping margin under 20%. Don't launch private label with an unproven product — high risk.

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Category: Operations · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/private-label