Private Label vs Branded Products: Why Your Store Brand Has Higher Expiry Risk

The Margin Game Nobody Talks About

Private label products are the darling of modern retail. Higher margins. Customer loyalty. Brand building. Every retail consultant will tell you to expand your private label range.

What they don't tell you: private label products often expire faster than branded alternatives, and the economics of that expiry can eat your margin advantage entirely.

Let's break down what actually happens with private label expiry—and why it matters more than you think.

The Shelf Life Gap

Compare typical shelf lives:

Cooking Oil:

Branded (Fortune, Saffola): 12-18 months
Private label: 9-12 months

Atta/Flour:

Branded (Aashirvaad, Pillsbury): 6-9 months
Private label: 4-6 months

Spices:

Branded (MDH, Everest): 18-24 months
Private label: 12-15 months

Snacks:

Branded (Lay's, Haldiram's): 4-6 months
Private label: 2-4 months

Dairy:

Branded (Amul, Mother Dairy): Standard shelf life
Private label: Often shorter, depends on manufacturer

Why the gap? Multiple factors:

**Manufacturing scale** - Branded products have optimized production lines with better preservation techniques
**Packaging investment** - Premium packaging (nitrogen flush, better barriers) costs more
**Formulation R&D** - Years of shelf stability research vs. quick-to-market private label
**Quality of inputs** - Higher-grade preservatives and stabilizers

The Margin Math That Misleads

Here's the calculation most retailers do:

Branded product:

MRP: ₹100
Landing cost: ₹85
Margin: 15%

Private label:

MRP: ₹80
Landing cost: ₹56
Margin: 30%

"Private label gives me double the margin!" Yes. But now factor in expiry.

Branded product expiry:

12-month shelf life
Distributor takes returns until 3 months to expiry
Typical expiry loss: 1-2% of purchases

Private label expiry:

6-month shelf life
You own the entire risk (no returns)
Typical expiry loss: 4-6% of purchases

Adjusted margin:

Branded: 15% - 1.5% expiry loss = 13.5% effective margin

Private label: 30% - 5% expiry loss = 25% effective margin

Still better, right? But wait.

The Hidden Costs

Inventory carrying cost:

Private label products need faster turnover. You need to order smaller quantities more frequently. Each order has:

Minimum order requirements
Transportation costs
Staff time for receiving and shelving

Markdown pressure:

When branded products approach expiry, you can return them or the manufacturer runs a scheme. When private label approaches expiry, you eat it—either as waste or as margin-destroying markdowns.

Quality perception risk:

A customer buys expired private label oil (you missed it on shelf). They don't think "that store has bad inventory management." They think "their brand is low quality." Private label expiry directly damages your brand.

The FIFO Failure With Private Labels

Here's what happens in real stores:

New stock arrives. Staff puts it on shelf in front of existing stock. Why? It's faster. The old stock gets pushed back.

With branded products, this matters less—shelf life is long, and even if old stock sits, it probably won't expire before sale.

With private label, this is deadly. That 4-month shelf life snack? It was already 2 months old when it arrived. You now have 2 months to sell it. If it gets pushed to the back for even 3 weeks, it's approaching expiry.

The shorter the shelf life, the more FIFO discipline matters. And FIFO discipline is exactly what's hardest to maintain in busy stores.

Category-by-Category Strategy

Staples (oil, atta, rice, dal):

Private label can work IF you have strong turnover. These are regular purchases—customers buy weekly or bi-weekly. Match your order quantities to actual sales velocity. Don't over-order just because MOQ is attractive.

Spices:

Dangerous category for private label. Low turnover (single packet lasts a household months), shorter shelf life, quality perception critical. Stick to branded unless you have exceptional turnover.

Snacks:

High risk. Snack purchases are impulse-driven, not predictable. Private label snacks with 2-month shelf life are expiry waiting to happen. If you do private label snacks, keep quantities tiny.

Dairy:

Depends entirely on your dairy infrastructure. If you have strong cold chain and high dairy turnover, private label works. If dairy is a secondary category for you, the expiry risk isn't worth the margin.

Personal care:

Lower risk—longer shelf life, predictable usage. This is where private label margin gains are most realizable.

The Data You Need

Before expanding private label, know your numbers:

**Category-wise turnover** - How many days of inventory do you hold in each category?
**Incoming shelf life** - How much shelf life do products have when they arrive from your supplier?
**Expiry rate by category** - What percentage of each category expires?
**Markdown history** - How much margin are you giving up to move slow stock?

If you don't have this data, you're flying blind. And in private label, blind flight crashes.

The Right Way to Do Private Label

Step 1: Start with high-turnover categories

Cooking oil, atta, dal—things people buy every week. Prove you can manage shelf life here before expanding.

Step 2: Match order quantity to velocity

Just because the supplier offers better pricing at 100 cases doesn't mean you should order 100 cases. Calculate your actual weekly sales, multiply by shelf life in weeks, order that much. No more.

Step 3: Demand incoming shelf life guarantees

Your supplier should deliver product with at least 70% of shelf life remaining. If a 6-month product arrives with only 3 months left, reject it or negotiate pricing that accounts for the risk.

Step 4: FIFO enforcement, not FIFO aspiration

Systematic shelf rotation. New stock to back. Daily checks on short-dated items. This isn't optional—it's the difference between margin gain and margin destruction.

Step 5: Track expiry separately

Your private label expiry rate should be tracked and reviewed monthly. If it's creeping up, you have a problem—either ordering too much, receiving too-short-dated stock, or failing on FIFO.

The Exit Ramp

Here's something nobody in private label consulting tells you: sometimes the right answer is to exit a category.

If your private label spices have 8% expiry rate while branded spices have 2% expiry rate, and the margin difference is 10%—you're not making money. You're working harder to break even while taking brand risk.

Categories where private label doesn't make sense for your specific store:

Low-turnover items where branded turnover is also slow
Quality-perception-critical categories where your brand can't match expectations
Short-shelf-life items where your inventory discipline isn't strong enough

The Technology Angle

Manual FIFO doesn't scale. At 50 SKUs, you can manage. At 500 SKUs, you can't.

What you need:

Batch-level tracking for all private label stock
Automated alerts at 30/15/7 days to expiry
Markdown recommendations based on remaining shelf life
Expiry rate tracking by category and by product

The stores that make private label work have systems. The stores that struggle with private label are trying to manage it manually.

The Bottom Line

Private label can absolutely improve your margins. But only if you understand that shorter shelf life is part of the deal—and you manage for it.

The 30% margin becomes 15% margin if you're losing 5% to expiry and 10% to markdowns. At that point, you might as well stock branded and save yourself the headache.

Private label is a game of precision. If you're going to play it, play it with data.

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