Store Brand vs Name Brand Cosmetics

The Secret About Private Labels

Yummy Mummy Wanda from Ottawa, ON asks:

I noticed that Walmart carries a generic line called Equate. The only difference in looking at the generic and the national name brand equivalent is the price....HUGE price difference. Is it worth buying these generic products?

Dear Wanda,

And so an astute reader discovers a well known aspect of the cosmetics industry - Private Label.

It is important to understand that the world of cosmetic manufacturing is like that of any other consumer good.  Where large scale stores can commission store label brands of well known national brand products.  

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Think of it like this - in the drugstore you can see a national brand of shampoo and conditioner and right beside it on the shelf you will see the store brand in the same packaging at a much lower price point.  Here is how the system works:

A large store with very big buying power will commission one of its vendors to create a store brand version of their best selling products.  Under this agreement the store continues to buy the national brand but also agrees to buy a minimum quantity of the store brand as well - from the very same vendor.

The vendor uses the same formula, same packages and changes the label to create this new "competing" product and because the store guarantees a large purchase the vendor can produce the store brand at a fraction of the price of their own nationally advertised brand.

There are no ads for the store brand and the distribution is limited to the store so production costs are very low - the vendor offers a huge volume discount to the store and the store sells it to the consumer at a very low price.

In these cases everyone wins - the vendor sells a great deal of product to the store, the store offers a great value to the customer and the customer can buy quality products at a very low price.

Of course the stores don't want the customers to know they are selling the same formula at different price points but in  truth every industry does this.  Think of store brand foods in the supermarket - most of which are produced by the big name manufacturers and sold side by side to their national counterparts.

In the cosmetics manufacturing world more money does not always mean better quality.

There are only a handful of cosmetic manufacturing facilities in North America.  Chances are if you have bought a cosmetic that says made in the USA or Canada, it was made in one of four major North American factories.

Large corporations have many different cosmetic brands under their umbrella. Ask the salesperson what the parent company is for their brand. If the brand you buy is owned by a large corporation it will be quite easy to find the exact same formula for a lot less money.

Manufacturing is based on volume and cosmetics are no exception. The largest cosmetic corporation in the world (L'Oreal) owns 26 different brands. The manufacturing process is about creating one formula and selling it under different labels, at different price points, in different markets and different retail outlets.

The idea that “professional” quality products are somehow superior to drug store brands is ridiculous. One of the arguments I have heard, for many years, is that professional quality products are not “watered down” yet the main ingredient in 99% of all cosmetics is water. (The chemistry used to formulate cosmetics is based on water and oil being mixed into an emulsion; so by default most formulas are aqueous.)

Private Label is a way for large cosmetic companies to find alternative distribution for their products while stores love offering a lower price to their customers.


Dan Thompson has spent many years as a cosmetics industry insider revealing the untruths told by the cosmetic companies. He is a constant media source as an industry expert and continues to lecture around the world including North America, Europe and the Middle East. Dan has helped develop numerous cosmetic brands and in 2008 launched Daniel Thompson Beauty.

Dan will expose the beauty myths the cosmetics industry is selling you every day and reveal the lipstick at a time.