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Further, if a supermarket has an exclusive deal, then average transportation expenses could be lower and the company would benefit from distributional economies of scale.Because of lower transport costs, the retailer could sell the product for less and reap a bigger profit margin.
Service offerings also have adopted white labeling. offers its consumers a branded credit card, though the card is actually provided by Barclays Bank (BCS).White labeling occurs when the manufacturer of an item uses the branding requested by the purchaser, or marketer, instead of its own.The end product appears as though it has been produced by the purchaser.A Kirkland-branded product often sits next to the national brand (that actually makes the product) on the shelf—identical products, different names, the national brand selling at a higher price.For example, Costco sells Saran Wrap—Saran is a trade name currently owned by S. Johnson & Son—but also sells its own Kirkland Signature stretch-tite plastic food wrap. Interestingly, both consumer product and retail executives tend to believe that co-branding between retailers and traditional national brands is a win-win situation.