Wednesday, July 12, 2017

The Company Called "Brandless"

Here’s a Don Boudreau letter to the Wall Street Journal:
Reporting on a new company that, we’re told, will sell “generic” consumer goods, your headline reads “Startup to Test the Power of Brands” (July 11).  Yet you introduce the company with the following: “Called Brandless….”

Regardless of its aspirations, a company called “Brandless” has a brand – namely, “Brandless.”  And the goods sold by that company are not generic; they’re branded.  The company’s targeted consumers, who allegedly are put off by brands, might indeed fancy that by buying products from a company named “Brandless” that they are cleverly escaping crass capitalist plots to overcharge for pointless marketing gimmicks.  But these consumers’ understanding of markets is mistaken.  Consumers’ ability to hold companies accountable for product quality is made possible by brands.  If Brandless peanut butter tastes yummy, consumers will continue to buy peanut butter sold under that brand; if instead Brandless peanut butter tastes like sawdust or makes those who eat it ill, consumers will avoid that brand.  Such accountability gives producers strong incentives to deliver consistently high-quality goods and services.  This happy consequence is what explains the rise and persistence of brands – even one called “Brandless.”

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030
The above originally appeared at Cafe Hayek


  1. Seems you missed the point Professor. I interpret the "brandless" idea as not paying extra for a equal quality product because it doesn't have a recognizable logo on it... And the "about us" section of the "brandless" web page agrees.

    I personally know someone who works in the paper products industry. It is a fact that many types of paper towels, bath tissue, etc are produced in the same factory with the same specifications and then "branded" or packaged under different names (the most well known names being more expensive).

    Of course no one will continue to buy a substandard product regardless of brand. This company is saying that you are currently getting ripped off by paying a premium for a well known brand name.

    1. The "Brandless" brand is no different than the "Dollar Shave" brand. A brand is merely shorthand for a set of characteristics relating to such things as price, quality, sometimes even emotional attachment.