Private label penetration

The share of an account's volume on paired SKUs that is the distributor's own label rather than the branded equivalent, per category, against the norm for accounts of the same type. A margin-mix measure as much as a sales one; the gap is valued at the margin difference on the branded volume at a stated conversion.

DefinitionThe share of an account's volume on paired SKUs that is the distributor's own label rather than the branded equivalent, per category, against the norm for accounts of the same type. A margin-mix measure as much as a sales one; the gap is valued at the margin difference on the branded volume at a stated conversion.

Over pairs, not categories

A category with no own-label option does not dilute it.

Type norm

Fine dining buys branded on principle. Compare contract caterers to contract caterers.

How it is computed

Volume of the distributor's own label divided by volume of own label plus the branded equivalent, per account, on paired items.

Example

An account buys 4,000 cases a year of items that have an own-label pair, 600 of them own label: 15 percent. Similar accounts are at 45.

Where it goes wrong

Own-label sales reported in total. The accounts that have never been offered the switch are not listed.

Articles that use this term

Wallet share and penetration · Distributors

Private label penetration per account: the margin mix the sales report does not show

How a distributor measures the share of each account's purchases that are its own private label against branded equivalents, from the invoice lines and the product master: penetration per account per category, the margin difference per line, the norm from accounts of the same type, the accounts buying branded where similar accounts buy own label and the value of the switch, and the identity that keeps own-label and branded revenue summing to the ledger.

16 Sept 20262 min read