Online commerce has grown from a niche experiment to a trillion‑dollar engine that powers entrepreneurship around the world. Within this ecosystem there are two popular approaches for merchants who want to sell products on marketplaces such as Amazon, Walmart or their own web stores: private label and wholesale.

A private‑label seller designs, sources and markets products under a unique brand name, while a wholesaler buys goods from established brands and resells them, often in bulk. Each approach has very different risk profiles, investment requirements and returns.

Understanding the difference between private label and wholesale is even more important in 2025 because governments and marketplaces have changed how cross‑border shipments are taxed and regulated. Tariffs, new documentation requirements and the end of the U.S. de minimis duty‑free exemption have significantly increased the cost of importing small packages.

These policy shifts are altering competitive dynamics and may push sellers toward one model over the other. In this article we will explain how each model works, examine the latest data on consumer behaviour and market growth, and analyse how recent policy changes influence the choice between private label and wholesale. We will finish with guidance on which model “wins” in 2025 and why the answer is more nuanced than it may seem.

Market context and growth trends

Private label was once associated with low‑quality store brands. Today it is a major force in retail, with premium ranges, innovative packaging and strong customer loyalty. According to a detailed 2025 statistics roundup, the global private‑label market was worth $915 billion in 2024 and is projected to reach $1.623 trillion by 2034.

In the United States the market grew 3.9 percent in 2024 to $271 billion, capturing around 20 percent of dollar share. Europe remains a mature region for private labels; sales reached roughly €354.5 billion (≈$412 billion) in 2024, representing 39 percent of the grocery market and growing faster than branded products. These figures highlight that private label is no longer a marginal option – it is a mainstream strategy with long‑term growth momentum.

The private‑label boom is driven by changing consumer preferences. A 2025 shopper study by Simon‑Kucher found that 54 percent of consumers increased their private‑label purchases year over year, while 42 percent primarily or exclusively bought private‑label items. When asked how they would respond to a modest 5 percent price increase due to tariffs, 43–49 percent of consumers said they would look for cheaper alternatives, and 38–40 percent planned to down‑trade.

Importantly, 78 percent indicated that they intend to maintain or increase their private‑label purchases regardless of future price fluctuations. Consumer perceptions about quality have also improved; surveys show that 60 percent of U.S. shoppers believe private‑label products deliver above‑average value, and a 2024 McKinsey report noted that over 80 percent of U.S. consumers rate private‑brand food quality as equal or better than national brands.

Adoption is especially strong among Gen Z and Millennials; more than 70 percent say they sometimes or always choose cheaper store‑brand alternatives, and high‑income households increasingly select grocery stores based on private‑label offerings. These statistics illustrate that private label appeals across demographics and income levels.

Wholesale remains a gigantic industry too, but its role is different. In wholesale ecommerce, sellers procure products from brands or manufacturers and resell them often to other businesses at a markup. It is part of the broader business‑to‑business (B2B) ecosystem. Shopify’s 2025 wholesale ecommerce guide notes that wholesale refers to selling products online in bulk at discounted rates and that the global B2B gross merchandise volume is projected to reach $25 trillion in 2025.

The guide emphasises that wholesale’s biggest advantage is lower operating costs; selling items in bulk captures larger orders and reduces marketing expenses, leading to a higher profit per unit. Modern software and platform features also automate manual tasks such as signup, pricing and fulfilment, allowing merchants to serve both wholesale and retail customers from the same website. While the private‑label figures demonstrate consumer adoption, wholesale statistics remind us that B2B trade still dwarfs the consumer segment.

How private label works

In a private‑label business, the seller conceives the product, specifies its features and packaging, and contracts a manufacturer to produce it. The finished goods are branded exclusively by the seller. For example, Amazon Basics batteries are manufactured by suppliers but packaged and marketed exclusively by Amazon.

A private‑label seller on Amazon creates unique products and leverages Amazon’s fulfilment and customer‑service infrastructure; this provides full control over branding, customization, pricing and positioning. Building a private‑label brand requires significant upfront work: product research, design, prototyping, packaging, brand registry, inventory sourcing and marketing. Yet the payoff can be substantial: sellers can command higher margins because they set their own prices, differentiate products and build an asset that may eventually be acquired by a larger company.

Private Label vs Wholesale in 2025: Which Model Wins After Policy Shifts?

Online commerce has grown from a niche experiment to a trillion‑dollar engine that powers entrepreneurship around the world. Within this ecosystem there are two popular approaches for merchants who want to sell products on marketplaces such as Amazon, Walmart or their own web stores: private label and wholesale. A private‑label seller designs, sources and markets products under a unique brand name, while a wholesaler buys goods from established brands and resells them, often in bulk. Each approach has very different risk profiles, investment requirements and returns.

Understanding the difference between private label and wholesale is even more important in 2025 because governments and marketplaces have changed how cross‑border shipments are taxed and regulated. Tariffs, new documentation requirements and the end of the U.S. de minimis duty‑free exemption have significantly increased the cost of importing small packages.

These policy shifts are altering competitive dynamics and may push sellers toward one model over the other. In this article we will explain how each model works, examine the latest data on consumer behaviour and market growth, and analyse how recent policy changes influence the choice between private label and wholesale. We will finish with guidance on which model “wins” in 2025 and why the answer is more nuanced than it may seem.

Market context and growth trends

Private label was once associated with low‑quality store brands. Today it is a major force in retail, with premium ranges, innovative packaging and strong customer loyalty. According to a detailed 2025 statistics roundup, the global private‑label market was worth $915 billion in 2024 and is projected to reach $1.623 trillion by 2034.

In the United States the market grew 3.9 percent in 2024 to $271 billion, capturing around 20 percent of dollar share. Europe remains a mature region for private labels; sales reached roughly €354.5 billion (≈$412 billion) in 2024, representing 39 percent of the grocery market and growing faster than branded products. These figures highlight that private label is no longer a marginal option – it is a mainstream strategy with long‑term growth momentum.

The private‑label boom is driven by changing consumer preferences. A 2025 shopper study by Simon‑Kucher found that 54 percent of consumers increased their private‑label purchases year over year, while 42 percent primarily or exclusively bought private‑label items. When asked how they would respond to a modest 5 percent price increase due to tariffs, 43–49 percent of consumers said they would look for cheaper alternatives, and 38–40 percent planned to down‑trade.

Importantly, 78 percent indicated that they intend to maintain or increase their private‑label purchases regardless of future price fluctuations. Consumer perceptions about quality have also improved; surveys show that 60 percent of U.S. shoppers believe private‑label products deliver above‑average value, and a 2024 McKinsey report noted that over 80 percent of U.S. consumers rate private‑brand food quality as equal or better than national brands.

Adoption is especially strong among Gen Z and Millennials; more than 70 percent say they sometimes or always choose cheaper store‑brand alternatives, and high‑income households increasingly select grocery stores based on private‑label offerings. These statistics illustrate that private label appeals across demographics and income levels.

Wholesale remains a gigantic industry too, but its role is different. In wholesale ecommerce, sellers procure products from brands or manufacturers and resell them often to other businesses at a markup. It is part of the broader business‑to‑business (B2B) ecosystem. Shopify’s 2025 wholesale ecommerce guide notes that wholesale refers to selling products online in bulk at discounted rates and that the global B2B gross merchandise volume is projected to reach $25 trillion in 2025.

The guide emphasises that wholesale’s biggest advantage is lower operating costs; selling items in bulk captures larger orders and reduces marketing expenses, leading to a higher profit per unit. Modern software and platform features also automate manual tasks such as signup, pricing and fulfilment, allowing merchants to serve both wholesale and retail customers from the same website. While the private‑label figures demonstrate consumer adoption, wholesale statistics remind us that B2B trade still dwarfs the consumer segment.

How private label works

In a private‑label business, the seller conceives the product, specifies its features and packaging, and contracts a manufacturer to produce it. The finished goods are branded exclusively by the seller. For example, Amazon Basics batteries are manufactured by suppliers but packaged and marketed exclusively by Amazon. A private‑label seller on Amazon creates unique products and leverages Amazon’s fulfilment and customer‑service infrastructure; this provides full control over branding, customization, pricing and positioning.

Building a private‑label brand requires significant upfront work: product research, design, prototyping, packaging, brand registry, inventory sourcing and marketing. Yet the payoff can be substantial: sellers can command higher margins because they set their own prices, differentiate products and build an asset that may eventually be acquired by a larger company.

Consumer adoption trends make private label particularly attractive in 2025. U.S. household penetration reached 99.9 percent in 2024, meaning nearly every household bought at least one private‑label grocery item. On Amazon, 54 percent of sellers use a private‑label model, making it the most common seller strategy.

Amazon hosts about 9.7 million seller accounts, with roughly 2 million actively selling, so the private‑label pool is enormous. Major retailers such as Walmart, Target and Amazon are also investing heavily in their own brands; one survey found that 33 percent of Walmart shoppers frequently buy its private labels, compared with 20 percent at Target and 14 percent at Amazon. These data underscore that the infrastructure and consumer demand for private label are already in place.

How wholesale works

Wholesale ecommerce involves buying brand‑name products in bulk and reselling them, typically with the help of fulfilment services. Sellers choose established products with existing demand rather than creating something new. On Amazon, this means purchasing inventory from brands or distributors and listing those products on Amazon’s marketplace. According to a detailed comparison by Getida, a wholesale seller benefits from faster startup and lower upfront costs.

Wholesale allows merchants to skip research and product development; they simply identify in‑demand items, secure accounts with manufacturers or distributors and negotiate bulk pricing. Once inventory is shipped to Amazon’s fulfilment centres, sellers list the products on existing pages or create new listings with competitive pricing.

Wholesale is attractive because it leverages existing brand awareness and Amazon’s infrastructure. However, it offers less control: wholesalers cannot modify the product or packaging, and they compete with many sellers for the buy box. Getida’s comparison highlights several differences:

Product ownership and branding: private label offers full ownership and brand control, while wholesale sellers merely have distribution rights.

Profit margins: private label can achieve higher margins because the seller controls pricing and costs, whereas wholesale margins are lower and squeezed by competition.

Customization: private label sellers can innovate and differentiate products; wholesale sellers are limited to the available inventory.

Inventory risk: private label carries higher risk because the seller owns unsold goods; wholesale carries less risk because the products are already established.

Profitability in wholesale is not trivial. Jungle Scout’s seller report (cited by Getida) found that 44 percent of wholesale sellers on Amazon achieve profit margins above 15 percent, and the top 13 percent enjoy 26–50 percent margins. These figures suggest that a disciplined approach to sourcing and operations can yield attractive returns, but competition and price pressure remain constant.

Policy shifts reshaping e‑commerce in 2025

The 2025 retail landscape is profoundly influenced by government policies aimed at addressing trade imbalances, illicit drug trafficking and supply‑chain security. These measures have direct consequences for sellers who rely on imported goods. Several key policy shifts include:

1. Tariffs and consumer response: In 2024 and 2025, governments around the world implemented new tariffs on imported goods. Simon‑Kucher’s 2025 U.S. Consumer Tariff Market Study found that even a modest 5 percent tariff prompts 43–49 percent of consumers to look for cheaper alternatives and 38–40 percent to down‑trade. The study notes that these tariffs are reinforcing the value‑seeking behaviour that powered private‑label growth during the inflationary period. Retailers and manufacturers are advised to expand private‑label assortments strategically and build tiered pricing to capture demand.

2. Suspension of the U.S. de minimis exemption: For years, U.S. regulations allowed duty‑free imports of parcels valued at less than $800 under the de minimis rule, enabling direct‑to‑consumer (DTC) cross‑border shipping from overseas. On July 30 2025 President Donald Trump issued an executive order suspending duty‑free de minimis treatment for all countries. The order states that all shipments previously eligible for the exemption will be subject to duties, taxes, fees and charges.

Reuters explains that the exemption officially ended on August 29 2025, increasing costs for retailers around the world selling to U.S. consumers. The article notes that the U.S. administration’s decision expands an earlier move that had already imposed tariffs on shipments from China and Hong Kong. In fiscal 2024, 1.36 billion packages worth $64.6 billion entered the U.S. under de minimis, and about 73 percent originated from China. The end of de minimis has triggered turmoil in postal systems worldwide; some postal carriers temporarily paused U.S. shipments while they adjust to the new duties. Small businesses and cross‑border sellers face additional paperwork and cost increases, prompting price hikes and potential delays.

3. Reciprocal tariffs and supply‑chain security: The White House executive order explains that the suspension of duty‑free treatment is part of a broader strategy to address trade deficits and the flow of illicit drugs. The order emphasises that evasion and deception are prevalent among low‑value imports, with shippers often using false invoices or deceptive packaging. By subjecting all low‑value shipments (except certain postal shipments) to duties and requiring more rigorous documentation, the U.S. aims to prevent illegal goods from slipping through customs and to ensure that foreign companies pay tariffs comparable to those faced by domestic importers.

These policy shifts directly affect sellers. Importing products from overseas is now more expensive and bureaucratic, particularly for small parcels. Sellers must evaluate whether their chosen model can absorb higher tariffs, additional duties and administrative complexity.

Implications for private label sellers

For private‑label merchants who source goods from overseas manufacturers, the end of the de minimis exemption raises landed costs per unit. Many private‑label products are manufactured in China, Vietnam or other low‑cost countries; without duty‑free entry, shipping thousands of small parcels directly to U.S. customers will incur duties and customs paperwork. Sellers may need to switch to bulk shipments (which were already subject to duties) or explore domestic sourcing. However, several factors cushion the impact for private label:

Value‑driven consumer behaviour: Tariffs and economic uncertainty make price a primary driver, pushing consumers toward affordable but quality alternatives. With 66 percent of shoppers emphasising price over brand loyalty and 31 percent saying brand factors are less important, private label is positioned to thrive. Even as tariffs raise costs, 78 percent of consumers plan to maintain or increase private‑label purchases.

Margin flexibility: Private‑label sellers set their own prices, giving them room to absorb some duties or adjust packaging sizes. They can also negotiate with manufacturers for lower production costs and adapt pack architecture to meet different channel demands.

Supply‑chain control: A private‑label brand can invest in local or near‑shore manufacturing to reduce dependence on overseas suppliers. While this requires capital, it mitigates tariff risk and allows faster shipping.

Brand equity and exit opportunities: Unlike wholesale sellers, private‑label entrepreneurs build an asset that can be sold. The example of Ring being acquired by Amazon for $1 billion illustrates that successful private‑label brands can attract large buyers. In a climate of regulatory change, owning a differentiated brand may be more valuable than trading generic products.

That said, private‑label operations face challenges. Compliance with safety regulations, labelling requirements and environmental standards can be complex. Higher tariffs may squeeze margins if sellers cannot raise prices. Increased shipping costs could deter price‑sensitive customers. Private‑label sellers must also invest in marketing and pay‑per‑click advertising to generate visibility on marketplaces. Those who succeed in 2025 will be the ones who diversify manufacturing, streamline logistics, design flexible packaging and invest in brand storytelling that resonates with value‑conscious shoppers.

Implications for wholesale sellers

Wholesale sellers rely heavily on imports from established brands. The elimination of de minimis means that even relatively low‑value goods now attract duties. This could erode the slim margins that wholesale sellers earn, especially in commoditised categories where price competition is fierce. Additional documentation and customs processing may delay shipments and require new logistics partnerships. Wholesale sellers face several specific issues:

Import duties: Bulk shipments have always been subject to duties; however, the elimination of the small‑parcel exemption removes a loophole that allowed some wholesalers to break shipments into multiple low‑value packages to avoid duties. Now, all shipments (except certain postal deliveries) incur fees and require formal entry.

Competition and price pressure: Because multiple sellers can list the same branded item, competition is intense. Getida’s comparison notes that wholesale profit margins are generally lower than private‑label margins. Tariffs may force sellers to raise prices, further tightening margins.

Supplier restrictions: Some brands restrict the number of authorized resellers or impose minimum advertised price policies. When margins shrink due to tariffs, sellers have less room to comply with these policies.

Limited differentiation: Wholesalers cannot change the product to justify higher pricing or reposition it in a premium segment. Their only levers are efficiency and scale.

Despite these challenges, wholesale remains appealing for newcomers who want a quick entry into Amazon or other marketplaces. Start‑up costs are lower because there is no need for research, development or brand building. Sellers can test the waters by buying small quantities of proven products. Tariffs may disproportionately hurt price‑sensitive segments, but niche categories with high brand loyalty (e.g., electronics or specialized hobby products) could still offer stable demand. Wholesale merchants who forge strong relationships with suppliers and focus on operational efficiency may continue to be profitable.

Which model wins in 2025?

Determining a winner between private label and wholesale in 2025 requires considering how policy shifts intersect with market trends and individual business goals. Here are key points to weigh:

1. Long‑term growth potential: The private‑label market is growing quickly; global sales are projected to climb steadily for the next decade. Consumer attitudes increasingly favour private labels, and premium tiers attract high‑income shoppers. Wholesale is enormous but is evolving as technology modernizes B2B interactions.

2. Impact of tariffs: Both models face higher landed costs when importing goods. Private‑label sellers can shift production or adjust pack sizes to manage tariffs, while wholesalers have less flexibility. The removal of the de minimis exemption particularly hurts sellers who relied on shipping small parcels from overseas.

3. Cash‑flow and risk: Private label requires larger upfront investment in product development, manufacturing and marketing but offers higher potential returns and brand equity. Wholesale offers faster cash turnover and lower entry costs but yields lower margins and less control. Tariff‑driven price increases could erode wholesale margins further.

4. Supply‑chain complexity: New documentation requirements for all shipments mean that sellers must invest in customs compliance. Private‑label sellers may be more willing to restructure supply chains (for example, by sourcing domestically or near‑shoring) because they control the product. Wholesale sellers are tied to brand owners’ supply‑chain decisions and may have less control.

5. Brand differentiation: Private‑label brands can tell unique stories and build communities around their products. In an environment where consumers seek value but also care about sustainability, transparency and quality, a distinctive brand can command loyalty even with price increases. Wholesale sellers cannot differentiate beyond customer service and delivery speed.

Given these factors, private label appears to have the edge in 2025. The combination of consumer loyalty, margin flexibility and the ability to adapt supply chains means private‑label sellers are better positioned to weather tariff‑related cost increases. Policy shifts like the end of de minimis further reduce the advantage of arbitraging duty‑free small parcels, which some wholesalers used to keep costs low. Meanwhile, private label benefits from macro‑trends—such as younger consumers’ openness to store brands and high‑income shoppers’ willingness to trade down—that continue to build momentum.

That does not mean wholesale is dead. For entrepreneurs with limited capital or those seeking to diversify product lines quickly, wholesale remains a viable entry point. It can also serve as a complementary channel for private‑label brands looking to fill gaps in their assortment. Sellers might start with wholesale to generate cash flow while gradually launching private‑label products to build a brand. The optimal strategy depends on individual circumstances, risk tolerance and long‑term goals.

Strategies to succeed after the policy shifts

Regardless of the chosen model, sellers should take proactive steps to adapt:

Optimise supply chains: Investigate domestic or regional manufacturing to reduce tariff exposure. Bulk shipping to a U.S. warehouse and then distributing domestically may be more cost‑effective than direct‑to‑consumer cross‑border shipping.

Invest in data and technology: Use analytics to monitor sales trends, inventory levels and profit margins. Simon‑Kucher recommends using retailer sales data and rapid test‑and‑learn loops to refine pack sizes, price tiers and promotional strategies.

Communicate value: Emphasise the quality and value of private‑label products. Many consumers already view private labels favourably; clear messaging about ingredients, sustainability and affordability can build trust.

Diversify channels: Consider selling on multiple marketplaces (Amazon, Walmart, eBay, Shopify) to reach different customer segments and mitigate platform‑specific changes. Wholesale sellers may explore B2B platforms or direct relationships with retailers to secure stable demand.

Plan for compliance: Keep abreast of regulatory updates and ensure all shipments have accurate documentation. Work with customs brokers or fulfilment partners who can handle the new requirements. Budget for duties and incorporate them into pricing strategies.

Policy shifts reshaping e‑commerce in 2025

1. Tariffs and consumer response: In 2024 and 2025, governments around the world implemented new tariffs on imported goods. Simon‑Kucher’s 2025 U.S. Consumer Tariff Market Study found that even a modest 5 percent tariff prompts 43–49 percent of consumers to look for cheaper alternatives and 38–40 percent to down‑trade. The study notes that these tariffs are reinforcing the value‑seeking behaviour that powered private‑label growth during the inflationary period. Retailers and manufacturers are advised to expand private‑label assortments strategically and build tiered pricing to capture demand.

2. Suspension of the U.S. de minimis exemption: For years, U.S. regulations allowed duty‑free imports of parcels valued at less than $800 under the de minimis rule, enabling direct‑to‑consumer (DTC) cross‑border shipping from overseas. On July 30 2025 President Donald Trump issued an executive order suspending duty‑free de minimis treatment for all countries. The order states that all shipments previously eligible for the exemption will be subject to duties, taxes, fees and charges.

Reuters explains that the exemption officially ended on August 29 2025, increasing costs for retailers around the world selling to U.S. consumers. The article notes that the U.S. administration’s decision expands an earlier move that had already imposed tariffs on shipments from China and Hong Kong. In fiscal 2024, 1.36 billion packages worth $64.6 billion entered the U.S. under de minimis, and about 73 percent originated from China. The end of de minimis has triggered turmoil in postal systems worldwide; some postal carriers temporarily paused U.S. shipments while they adjust to the new duties. Small businesses and cross‑border sellers face additional paperwork and cost increases, prompting price hikes and potential delays.

3. Reciprocal tariffs and supply‑chain security: The White House executive order explains that the suspension of duty‑free treatment is part of a broader strategy to address trade deficits and the flow of illicit drugs. The order emphasises that evasion and deception are prevalent among low‑value imports, with shippers often using false invoices or deceptive packaging. By subjecting all low‑value shipments (except certain postal shipments) to duties and requiring more rigorous documentation, the U.S. aims to prevent illegal goods from slipping through customs and to ensure that foreign companies pay tariffs comparable to those faced by domestic importers.

These policy shifts directly affect sellers. Importing products from overseas is now more expensive and bureaucratic, particularly for small parcels. Sellers must evaluate whether their chosen model can absorb higher tariffs, additional duties and administrative complexity.

Implications for private label sellers

For private‑label merchants who source goods from overseas manufacturers, the end of the de minimis exemption raises landed costs per unit. Many private‑label products are manufactured in China, Vietnam or other low‑cost countries; without duty‑free entry, shipping thousands of small parcels directly to U.S. customers will incur duties and customs paperwork. Sellers may need to switch to bulk shipments (which were already subject to duties) or explore domestic sourcing. However, several factors cushion the impact for private label:

Value‑driven consumer behaviour: Tariffs and economic uncertainty make price a primary driver, pushing consumers toward affordable but quality alternatives. With 66 percent of shoppers emphasising price over brand loyalty and 31 percent saying brand factors are less important, private label is positioned to thrive. Even as tariffs raise costs, 78 percent of consumers plan to maintain or increase private‑label purchases.

Margin flexibility: Private‑label sellers set their own prices, giving them room to absorb some duties or adjust packaging sizes. They can also negotiate with manufacturers for lower production costs and adapt pack architecture to meet different channel demands.

Supply‑chain control: A private‑label brand can invest in local or near‑shore manufacturing to reduce dependence on overseas suppliers. While this requires capital, it mitigates tariff risk and allows faster shipping.

Brand equity and exit opportunities: Unlike wholesale sellers, private‑label entrepreneurs build an asset that can be sold. The example of Ring being acquired by Amazon for $1 billion illustrates that successful private‑label brands can attract large buyers. In a climate of regulatory change, owning a differentiated brand may be more valuable than trading generic products.

That said, private‑label operations face challenges. Compliance with safety regulations, labelling requirements and environmental standards can be complex. Higher tariffs may squeeze margins if sellers cannot raise prices. Increased shipping costs could deter price‑sensitive customers. Private‑label sellers must also invest in marketing and pay‑per‑click advertising to generate visibility on marketplaces. Those who succeed in 2025 will be the ones who diversify manufacturing, streamline logistics, design flexible packaging and invest in brand storytelling that resonates with value‑conscious shoppers.

Implications for wholesale sellers

Wholesale sellers rely heavily on imports from established brands. The elimination of de minimis means that even relatively low‑value goods now attract duties. This could erode the slim margins that wholesale sellers earn, especially in commoditised categories where price competition is fierce. Additional documentation and customs processing may delay shipments and require new logistics partnerships. Wholesale sellers face several specific issues:

Import duties: Bulk shipments have always been subject to duties; however, the elimination of the small‑parcel exemption removes a loophole that allowed some wholesalers to break shipments into multiple low‑value packages to avoid duties. Now, all shipments (except certain postal deliveries) incur fees and require formal entry.

Competition and price pressure: Because multiple sellers can list the same branded item, competition is intense. Getida’s comparison notes that wholesale profit margins are generally lower than private‑label margins. Tariffs may force sellers to raise prices, further tightening margins.

Supplier restrictions: Some brands restrict the number of authorized resellers or impose minimum advertised price policies. When margins shrink due to tariffs, sellers have less room to comply with these policies.

Limited differentiation: Wholesalers cannot change the product to justify higher pricing or reposition it in a premium segment. Their only levers are efficiency and scale.

Despite these challenges, wholesale remains appealing for newcomers who want a quick entry into Amazon or other marketplaces. Start‑up costs are lower because there is no need for research, development or brand building. Sellers can test the waters by buying small quantities of proven products. Tariffs may disproportionately hurt price‑sensitive segments, but niche categories with high brand loyalty (e.g., electronics or specialized hobby products) could still offer stable demand. Wholesale merchants who forge strong relationships with suppliers and focus on operational efficiency may continue to be profitable.

Which model wins in 2025?

Determining a winner between private label and wholesale in 2025 requires considering how policy shifts intersect with market trends and individual business goals. Here are key points to weigh:

1. Long‑term growth potential: The private‑label market is growing quickly; global sales are projected to climb steadily for the next decade. Consumer attitudes increasingly favour private labels, and premium tiers attract high‑income shoppers. Wholesale is enormous but is evolving as technology modernizes B2B interactions.

2. Impact of tariffs: Both models face higher landed costs when importing goods. Private‑label sellers can shift production or adjust pack sizes to manage tariffs, while wholesalers have less flexibility. The removal of the de minimis exemption particularly hurts sellers who relied on shipping small parcels from overseas.

3. Cash‑flow and risk: Private label requires larger upfront investment in product development, manufacturing and marketing but offers higher potential returns and brand equity. Wholesale offers faster cash turnover and lower entry costs but yields lower margins and less control. Tariff‑driven price increases could erode wholesale margins further.

4. Supply‑chain complexity: New documentation requirements for all shipments mean that sellers must invest in customs compliance. Private‑label sellers may be more willing to restructure supply chains (for example, by sourcing domestically or near‑shoring) because they control the product. Wholesale sellers are tied to brand owners’ supply‑chain decisions and may have less control.

5. Brand differentiation: Private‑label brands can tell unique stories and build communities around their products. In an environment where consumers seek value but also care about sustainability, transparency and quality, a distinctive brand can command loyalty even with price increases. Wholesale sellers cannot differentiate beyond customer service and delivery speed.

Given these factors, private label appears to have the edge in 2025. The combination of consumer loyalty, margin flexibility and the ability to adapt supply chains means private‑label sellers are better positioned to weather tariff‑related cost increases. Policy shifts like the end of de minimis further reduce the advantage of arbitraging duty‑free small parcels, which some wholesalers used to keep costs low. Meanwhile, private label benefits from macro‑trends—such as younger consumers’ openness to store brands and high‑income shoppers’ willingness to trade down—that continue to build momentum.

That does not mean wholesale is dead. For entrepreneurs with limited capital or those seeking to diversify product lines quickly, wholesale remains a viable entry point. It can also serve as a complementary channel for private‑label brands looking to fill gaps in their assortment. Sellers might start with wholesale to generate cash flow while gradually launching private‑label products to build a brand. The optimal strategy depends on individual circumstances, risk tolerance and long‑term goals.

Strategies to succeed after the policy shifts

Regardless of the chosen model, sellers should take proactive steps to adapt:

Optimise supply chains: Investigate domestic or regional manufacturing to reduce tariff exposure. Bulk shipping to a U.S. warehouse and then distributing domestically may be more cost‑effective than direct‑to‑consumer cross‑border shipping.

Invest in data and technology: Use analytics to monitor sales trends, inventory levels and profit margins. Simon‑Kucher recommends using retailer sales data and rapid test‑and‑learn loops to refine pack sizes, price tiers and promotional strategies.

Communicate value: Emphasise the quality and value of private‑label products. Many consumers already view private labels favourably; clear messaging about ingredients, sustainability and affordability can build trust.

Diversify channels: Consider selling on multiple marketplaces (Amazon, Walmart, eBay, Shopify) to reach different customer segments and mitigate platform‑specific changes. Wholesale sellers may explore B2B platforms or direct relationships with retailers to secure stable demand.

Plan for compliance: Keep abreast of regulatory updates and ensure all shipments have accurate documentation. Work with customs brokers or fulfilment partners who can handle the new requirements. Budget for duties and incorporate them into pricing strategies.

Conclusion

The year 2025 marks a turning point for online commerce. Rapid growth of private‑label brands, changing consumer perceptions and sweeping policy shifts are reshaping the competitive landscape. Data show that private label is booming: global sales are increasing, U.S. households are almost universally adopting store brands and younger, high‑income consumers are embracing them. Tariff pressures and the elimination of the de minimis exemption encourage value‑seeking behaviour that favours private‑label offerings. Wholesale remains a colossal and accessible model, but it faces margin pressure and stricter import regulations.

Ultimately, the “winner” depends on the seller’s objectives. Private label offers higher margins, brand equity and adaptability but requires investment and strategic execution. Wholesale offers speed and lower upfront risk but yields lower margins and less control. In 2025, with tariffs rising and cross‑border shipping becoming more complex, the scales tip toward private labelyet a hybrid approach may offer the best of both worlds. Sellers who adapt to policy shifts, invest in supply‑chain resilience and build brands that resonate with value‑conscious consumers will be well positioned to thrive in the evolving ecommerce marketplace.