Rebadged Products: Good Idea or Epic Fail?

Batman logo on Ford truck

Sometimes companies take another company’s product, have them make a few changes like putting their logo and name on it, and sell it as their own product. This practice is called rebadging. It is very appealing from both company’s point of view. For the original company, they just make a few more products with minimal changes, and they make more money, which helps recover their development costs. Plus, they don’t have to support it, because the other company sells it as their own.

For the original company, they just make a few more products with minimal changes, and they make more money, which helps recover their development costs. Plus, they don’t have to support it, because the other company sells it as their own.

For the purchasing company, they now have an entry into a market where they typically have no representation, they already have a support staff, so this just becomes another product on their list, and regardless of how much they are paying the other company to produce it, they sell it for more and make a profit on each unit sold.

Win-win, right?

Not necessarily. It depends on how upfront and well-known the arrangement is. Typically, the consumer buys it thinking it was designed and developed by the company that has their name on it. When they discover differently, and these days that is a near certainty, they can easily feel betrayed, which costs brand loyalty. Brand loyalty is very difficult and costly to acquire and is one reason why companies like Apple are doing so well today.

Back many years ago, when I was young and had very limited money, I bought a monitor from a well-known computer company. Before doing so, I talked with the folks who worked on it, and got to know them well. It was one of the only, if not the only, black monitor on the market at the time, and I could only afford the 15″, not the 17″ I could have purchased for the same price for a monitor from a different company. I even helped them edit their end-user documentation.

Imagine my surprise when later I discovered that my expensive monitor was a rebadged product from another company. Even worse, the markup I paid would have snagged me the 17″ of the original. Wow. I never trusted them again. I’m actually pretty sure I never bought another product from them ever again.

I think back over that today and wonder if they ever truly understood how much selling me (and others) that monitor really cost them?

Just something to think about.

 

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