The Law of Private Labeling

Ordinary retail is simple: the store sells other companies' brands. The shopper wants TIDE, NIKE, RAO'S, or LA ROCHE-POSAY, and the retailer earns a margin for making it available. Private labeling changes that relationship. The retailer places its own mark on the goods and asks consumers to trust its judgment and consistency even when the factory is not disclosed.

That is why the subject belongs in trademark law. A private label is a shortcut. It saves consumers from re-evaluating each item, producer, ingredient source, review history, defect rate, and price. The value is not that the retailer made the product, it's that the retailer selected, specified, priced, and stands behind it.

Why UPCs and Online Shopping Matter

Universal product codes (UPCs) and online shopping made private labeling more valuable. A national-brand product is easy to compare. The same UPC or product page lets a shopper scan a package, check another retailer's price, and buy from the lowest-cost channel. Online retail accelerates this behavior by collapsing shelves into sortable listings.

A private label resists that comparison. It usually has a retailer-controlled brand name, packaging, and product identifier. The manufacturer may be a competent third-party supplier, but the consumer-facing product is Costco's KIRKLAND SIGNATURE, Target's GOOD & GATHER, TRADER JOE'S, or GOOP BEAUTY, not the supplier's house brand. This is sometimes described pejoratively as obfuscation, but the legal point is more precise: the retailer substitutes its own source signal for the manufacturer's public-facing identity.

The Retailer Becomes the Brand

KIRKLAND SIGNATURE is the cleanest example. Costco states in its 2025 annual report that it has invested in its Costco Wholesale trademarks and KIRKLAND SIGNATURE, and that Kirkland products help lower costs, differentiate merchandise, and generally earn higher margins. Costco also treats consistent quality, competitive pricing, and availability as essential to member loyalty. That is private labeling in its mature form: the product may be made by different suppliers, but the recurring goodwill belongs to Costco.

GOOD & GATHER performs a similar function for Target's food business. Target introduced it as an owned food and beverage brand developed by the retailer's internal team, with quality and taste tests, ingredient standards, and a money-back guarantee. It's a way for Target to convert food shopping into Target-branded trust.

TRADER JOE'S is more explicit. It has said that more than 80 percent of its products are private label and that using the Trader Joe's label, rather than a brand-name or supplier label, helps keep costs low. Its FAQ also says Trader Joe's tastes everything before putting its name on it. The store is not merely where the brand is sold. The store is the brand.

GOOP shows the lifestyle version. The brand describes itself in terms of storytelling, considered curation, taste, discernment, and vetted experts. However, when it sells GOOP BEAUTY or GWYN products, the signal changes from recommendation to source. The consumer is buying something goop put its name on.

Supplier Leverage Flips

Private labeling also changes bargaining power. When a retailer depends on a national brand, the manufacturer owns the customer-facing equity. If the manufacturer raises prices, reduces supply, or leaves the channel, the retailer must absorb the disruption: "we no longer carry that brand."

With a private label, the retailer owns the customer-facing promise. The supplier may be indispensable operationally, but it's less indispensable reputationally. If a supplier fails on cost, capacity, quality or availability, the retailer can move production to another approved supplier while preserving the same consumer relationship. Reviews, repeat purchases, shelf placement, app reorders, and customer data accumulate around the retailer's mark.

Why Trademark Law Fits

The definition of a trademark in 15 U.S.C. § 1127 includes a mark that identifies and distinguishes goods and indicates source, even if that source is unknown. The statute doesn't require the consumer to know the factory. It requires that the mark function as a source identifier.

The related-company provision in 15 U.S.C. § 1055 also fits private labeling. It allows use of a mark by controlled related companies to benefit the registrant, provided the mark is not used to deceive the public and it recognizes control over the nature and quality of goods or services. That is the architecture: the supplier can make the goods, but the retailer must control the brand promise.

The cases say the same thing. In El Greco Leather Products Co. v. Shoe World, Inc., the Second Circuit described the right to control the quality of goods sold under a trademark as one of the most valuable protections afforded by U.S. trademark law. In Ballet Makers, Inc. v. United States Shoe Corp., the court stated that the "source" of goods in trademark law is the person who controls quality. Private labels are not second-class trademarks. They're trademark law operating as intended.

The Limiting Principle

Private labeling is powerful, but it's not a license to mislead. A retailer should be careful with country-of-origin claims, "made by" statements, ingredient promises, environmental claims, and packaging that too closely mimics a national brand. The retailer also needs supplier agreements, specifications, inspection rights, recall obligations, and records showing actual quality control. A private label gains legal strength from consistency; it loses credibility if the mark becomes a thin wrapper over uncontrolled sourcing.

The best private labels do more than hide the manufacturer. They replace the manufacturer's public identity with the retailer's accountability. The consumer buys the product because Costco, Target, Trader Joe's, or goop put its name on it. That's the commercial bargain. It's also the legal theory.

Anton Hopen is a registered patent attorney and a shareholder at Trenam Law in Tampa, Florida. He is board certified in intellectual property by The Florida Bar.