We’re all looking to spend less money, especially during these difficult times of high inflation. And one of the best ways to accomplish this is by opting for generic or private label brands instead of the expensive name brand alternatives when shopping.
Name brands have worked their way into our lives, but they come with a premium attached. And then there’s the big question of: what products or purchases should I go generic with and when should I just stick with the name brand that I know and am more familiar with?
In this post we’ll talk about why we’re fans of generics and store brands, and things you may want to consider when shopping. We’ll also cover some categories where it makes sense to buy name brands vs generics, as sometimes people accidently cross over into cheap territory in an attempt to become more frugal.
Reasons to Buy Generic & Store Brand Labels
Private labels (aka store brands) make up roughly 18% of overall sales for retailers nationwide. Some store brands have developed a cult following similar to the major name brands (Like Kirkland Signature, Costco’s private label brand)
Store brands are cheaper: While name brands spend a TON of money on advertising and marketing, store brands do not… So they can sell their products quite a bit cheaper to consumers. Studies show that your average savings buying generic brands in the grocery store is 25% over snagging the name brand equivalent. But those discounts can be considerably higher, depending on the specific item.
The ingredients are the same: Sugar is sugar, flour is flour, and ibuprofen is ibuprofen. Most store-brand products have the exact same ingredients or components and are made very similarly to their name brand counterparts. Much of the time there isn’t a noticeable difference in quality.
They taste the same: Thanks to a taste-test study from Consumer Reports, it’s confirmed that store brands taste just as good as their name-brand counterparts. You’re not buying something gross or funky.
All in all, buying store brands and private labels snags you the same stuff at a cheaper price. I don’t know about you, but I’d rather be saving/investing my extra dollars than giving more away!
Best Items to Buy Generic
OK, so let’s name a few product categories where you should almost never be buying the name brand version.
1. Over The Counter Drugs
First, name brand over the counter drugs make no sense to me at all. When the active ingredient is exactly the same as the store brand, we should all be reaching for the generic option.
It’s also better to get generic prescription drugs if they work for you as well. They’ll save you a TON of money, so check in with your doctor or the pharmacist.
2. Baby Formula
This one’s a big money saver if you buy the generic brand. We found this out recently because Matt typically buys baby formula from Aldi. But on a recent beach trip he ran out and had to snag some name brand formula from the grocery store. It turned out to be TWICE as much!!
By the way… Costco is a great place to get baby formula too. Their Kirkland Signature formula is roughly half the price of the name brand equivalent. It’s one of the best perks of Costco membership!
3. Diapers
As long as your kid doesn’t have rashes, who cares what brand diapers they’re in! Some are more absorbent or better fitting than others, but it doesn’t come down to whether the diapers are name brand or not.
Personally, with the first two kids we used cloth diapers. They were great but also a lot of work. So we opted for disposable with kid #3, and after trying a few different varieties, we never found a difference between the different brands. But, surprise surprise, the Costco KS diapers worked the best for us. And they saved us a decent chunk of change.
4. Alcohol (Mostly)
To be honest, it can be hit or miss on this one. Generic craft beer is pretty rough in my experience. Costco’s beer is not very good and Aldi beers suck pretty badly too.
But off-brand spirits and private labels are quite good. You can save a lot on those. This is largely due to the fact that most folks are mixing multiple ingredients together to make a drink. Oftentimes it has more to do with making sure your quantities are correct.
Unless you’re a connoisseur, don’t buy the expensive spirits! Buy private label or store brand and save the cash. That is, unless you’re drinking that scotch whisky straight.
5. Bottled Water
In most US cities, you should just be drinking water from the tap as often as possible. But it’s incredible to see the differentiation in the water category. From fancy Fiji to store brand, you could pay 5x as much for an almost identical item!
Try & remind yourself that expensive water is all marketing & Jedi mind tricks. Most bottled water actually comes from municipal sources, not some steam in the Alps. You’re most likely paying for how it makes you feel while holding the bottle.
6. Glasses
Check out sites like Zenni Optical or Goggles4u in order to get your prescription glasses at a massive discount over the name brand equivalents.
Definitely make sure you’re going into the optometrist to ensure that your prescription is correct. But then take that info and order your glasses online to save a ton. We promise, you’ll see just as well! And you’ll save a ton.
7. Gasoline
Some people are convinced that buying gas at a major national gas station chain is better for your car than purchasing gas at more of an off-brand station or at a warehouse club. It’s not true!
Buying cheaper gas will not harm your car – as long as you are getting the octane level made for your vehicle. Some station chains have done a great job of branding their gasoline as special with fancy detergents, but there’s truly no discernible difference.
Pro tip: If you live near a Costco, buying gas there can make the entire membership worth it.
8. Organics
If eating organic is important to you, it’s gotten a lot easier to eat organic on a budget. You can definitely get store-brand organics now on the regular from a slew of grocery stores. So it doesn’t come down to whether you’re forking out the money for the name brand individually wrapped, single-serve kiwi.
All in all, there are a TON of categories where comparing name brands vs. generics, the only difference is the price you pay!
When Buying Name Brands Make Sense
There’s a big difference between being frugal, vs. cheap. Sometimes it makes sense to spring for name brands vs generics. Here are a few scenarios:
When you have a coupon: Coupons are typically for name-brand items. So if you’re good at shopping sales, you can potentially save money buying name brands.
There is no generic equivalent: Sometimes with items like hair dye or some cosmetics, there isn’t a generic available with the same formula.These would be instances where the quality isn’t quite the same and the product is different enough to where the name brand might make sense.
Better quality and guarantee: A great example would be the fancy tool company Snap-On, who has lifetime warranties on their tools. Many outdoor companies like Osprey guarantee their backpacks for life. “Buy it for life” is a great reddit group dedicated to high quality and brand names.
Supporting company values & mission: Sometimes you’re not just buying a product, but supporting a cause. Patagonia is an easy example here because they’ve pledged 1% of their sales to the preservation and restoration of the natural environment.
Lastly, name brands can be better because when you’re sticking with what you know. If it’s not too much more expensive and you enjoy whatever you’re buying, that’s OK! No shame in that game.
Switching from Name Brands to Generics
If you’re umming and arring over the decision to buy cheaper, generic products, here are a few tips for deciding…
First, there’s no harm in giving it a shot! And specifically in situations where it won’t make a major difference. For instance, Aldi and Lidl have a double guarantee on most of their items. You get a replacement plus a full refund. What do you have to lose!?
Next, try looking for user reviews. That aggregate knowledge can help you determine if the generic brand is lame before you click to buy. Sometimes just one individual review can be helpful. (Like when I got a bottle of Kirkland signature tequila recently. One lady had two bottles in her cart so I asked her about it. And she steered me right!)
Lastly, check the return status of your purchase. For example, REI has an incredible return policy. So checking out one of the REI branded items is less of a gamble considering their 100% satisfaction guaranteed return policy.
Pro tip: Sometimes your credit card has secondary benefits like return protection if your retailer doesn’t honor returns!
The Bottom Line: Name Brands vs. Generics
We’ve all got a few name brands that we are fans of and we will stick to buying. But savvy shoppers should try to be as flexible as possible to try store brand or generic equivalents. Oftentimes we find out that we like them more than the traditional name brand (I’m looking at you Costco natural peanut butter).
It’s really helpful to stretch ourselves to adopt frugal values for the sake of saving on groceries or in other areas of life. Truly comparing name brands vs. generics can save you meaningful dollars. Try it!
Related posts to check out:
Beer Tasting Notes…
While talking about name brands vs. generics we enjoyed a Spotted Cow by New Glarus. Big thanks to James for donating these beers to the show! We could really use your help to spread the word about How To Money! Hit the share button, subscribe if you’re not already a regular, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to spread the word to get more people doing smart things with their money in these difficult times!
Best friends out!
