Private labeling was pioneered by a few large retail oriented contractors in the mid to late 1990s.  Others looked at the concept and made their own leap.  These are not inconsequential contractors, but some of the largest and most successful in the country.

These retailing contractors private label for the following reasons:

·         Control over the brand – It’s the only brand they own, the only brand that can’t be taken away, and the only brand that can’t be offered to a competitor.

·         Repeat business – When consumers look at the brand name on a furnace or air conditioner and see the private labeled name (and phone number and website) it’s natural to call the name on the box.  Private labeling locks customers in for the life of the product, no matter who happens to own the home.

·         Less price competition – Private labeling makes it impossible for homeowners to lure contractors into a reverse auction for the sale and installation of the identical products.

·         Profitability – The companies that private label report greater bottom line profits because they are no longer paying for manufacturer branding building, dealer meetings, and incentive trips.  The savings falls to the bottom line.

·         Greater equity – Private label companies build brand equity that carries a tangible value when its time to sell.