ANDREW MORAN

Is a brand that calls itself Brandless in the name of fighting brands still a brand itself? In short, yes. A new startup, Brandless, aims to test the power of names by selling generic products at simple prices. It’s a modest concept – but it’s generating quite the buzz. Brandless already boasts headlines in The Wall Street Journal and NBC News and has raised $50 million over three rounds of venture funding.

Founded by the San Francisco entrepreneurs Tina Sharkey and Ido Leffle, the new online supermarket is selling a broad range of goods – fluoride-free toothpaste, pasta sauce, and office supplies – for just $3. Abiding by the mantra of “better shouldn’t cost more,” Brandless says that it can sell items for a few bucks by erasing the so-called brand tax, which entails retail space, warehousing, distributing and marketing.

Ultimately, Brandless is about defining minimalism and being natural:

We feel like as a nation, we have become quite polarized, and we see all people as the same. We deeply believe people being able to live their values.

So, how is Brandless embracing minimalism? Shoppers will only have one choice of each item. How is it all natural? A toilet bowl cleaner will contain a non-toxic formula, be EPA Safer Choice Certified and not have conducted any animal testing. If it’s food you’re interested in, then don’t worry because Brandless white cheddar quinoa puffs are gluten- and dairy-free without artificial flavors.

Yum!

Moving forward, Brandless is looking to take a slice of that $2 trillion consumer packaged goods market:

We wanted to make sure everybody has access, whether on the coast, in the city, in the mountains.

We will absolutely scale our logistics and operations to work to delight everybody as quickly and we can. We’re just getting started.

Despite reports suggesting that Brandless is looking to take on the model of brand names, we must remember that Brandless is a brand, too. It doesn’t matter if they’re selling peanut butter, nectars or tongs, they’re all marketed under the Brandless moniker.

Brandless customers may think they’re escaping the iniquitous free market system, but they aren’t. One of the reasons why the idea of branding is powerful is because it holds the companies accountable.

If you head over to the grocery store today, you will notice several different brands of ketchup. If Heinz provides an inferior product, then you can buy French’s – and vice versa. Ditto for Brandless. If Brandless is selling delicious ketchup then customers will continue to purchase ketchup from that brand. On the other hand, if the Brandless ketchup tastes awful, then those customers will go elsewhere.

Moreover, brands act as quality assurance agents because customers do not have the complete information about product quality at the point of purchase. The name reminds someone if something is worth buying or not.

What many fail to realize is that brands serve a necessary market function. Cynical shoppers say they are paying a higher price for brand-name goods than other products that do not have a well-known identity. This idea is what prompted the Soviet Union, following the Communist revolution in 1917, to scrap brand names as well as factory production markers altogether. What transpired afterward was a marketplace supplied with low-quality items and many dissatisfied consumers.

When a brand is eliminated, two things happen: first, customers cannot rely on their past experiences to determine what products they should and shouldn’t buy. Second, consumers are unable to penalize or reward businesses based on their goods and services. This incentivizes the faceless manufacturer to continue supplying inferior noodles, razor blades or sodas.

If you’re concerned about your health, then you should also be grateful that brands exist. Let’s say, for example, that a specific brand of breaded chicken has caused a salmonella outbreak. With a branding system, you can identify which brand of meat you want to buy. Without one, you risk contracting salmonella poisoning.

Yes, brand name products may come with a premium, but this still benefits the consumer with high-quality products. Indeed, when a shopper relies on a brand name, the company is incentivized to offer customers with great products because they can justify higher prices with sublime past performance.

Which brands survive or die on a supermarket shelf is determined by voluntary transactions. The former continues to maintain or advance the quality of their products, while the latter tries to improve to stay alive.

In the end, to suggest that Brandless is not a brand is a tad disingenuous. Besides, being a brand is no reason to feel ashamed. Brands – even if they refer to themselves as Brandless – are important because they make sure businesses are held responsible and deliver top-notch goods and services at a competitive price.

Some, like the London Guardian and The New York Times, contend that the market is stressing us out and making all of us unhappy by offering too many choices. It is perplexing how too much choice can create resentment and anxiety in any society. They should try to live in a socialist paradise, where minimal choice is to be expected, a la Venezuela. Let’s be honest: how could a social justice hipster acclimate to a marketplace without three-dozen types of hair gel and a new Apple iPhone every eighteen months to take selfies fighting capitalism?

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Andrew Moran

Economics Correspondent at LibertyNation.com

Andrew has written extensively on economic, finance and political issues for a decade. In addition to Liberty Nation, Andrew writes for EarnForex.com, Economic Collapse News and LearnBonds. He is the author of three books, including “The War on Cash.”