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Meet the New No-Brand Brands Selling $3 Shampoo

A crop of beauty and personal-care non-brands offer inexpensive products without the marketing markup.

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Public Goods’ assortment.

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In the early ’80s, grocery stores started selling generic products in stark white packaging with minimalist black print that said very little beyond what the product was, like “hand soap” or “corn,” for example. My mom, always cost-conscious, tried them out because they were much cheaper than name-brand versions — and even cheaper than store-brand versions of items. She and all the other neighborhood moms, however, got quickly skeeved out not knowing where or how they were made, as well as discovering some obvious quality differences. This time capsule of a New York Times article, circa 1986, describes how generics died a fairly quick death because of these issues.

It’s now a generation later, and there are a few new brands offering beauty products, personal-care items, cleaning supplies, and food with the same premise as those old generics: Why pay a ton of money for what’s essentially branding and advertising? This time around, though, it’s a very different proposition for both brands — or, rather, non-brands — and consumers alike.

Take Brandless, for example, which just debuted to much fanfare and media coverage last week. It launched with $50 million in funding and two savvy serial entrepreneurs at its helm: Tina Sharkey, who co-founded iVillage, and Ido Leffler, who co-founded Yes To; many other credentials fill out both of their resumes. The hook is that every single thing, from hand lotion to peanut butter, costs only $3.

“Literally I woke up in the middle of the night one night and had a bad feeling in my stomach. I woke up my wife and I said, ‘Babe, people are paying too much for stuff. We’re gonna figure this out,’” Leffler said to me at a Brandless launch party last week. He especially thinks that natural and organic products are too expensive.

Leffler claims that Brandless is able to keep costs down by “taking the inefficiency out of the marketplace” and avoiding things like a large marketing budget and distributor costs. Brandless’s chief merchant told USA Today: “We’re redefining what it means to be a brand.” Bottom line: It’s still a brand.

Brandless offers 115 products in the grocery, beauty, and personal-care categories, and it will only sell direct to consumers via its website. That product number will increase to 200 by the end of the summer and to over 300 by the end of the year, and will eventually include things like feminine hygiene products. There is a long list of ingredients, like parabens and sulfates, that Brandless doesn’t use. Some of the products are certified organic, all are GMO-free, and some items, like paper products, are sustainably made from things like bamboo. Beauty products at the moment include basics like hand soap, a perfectly lovely citrus bergamot hand lotion, lip balm, cotton rounds, and coconut oil that Leffler pitched me on for both my hair and my stir-fry.

Brandless is sort of a mashup of the dollar-store concept, where everything is off-brand and below a certain price point, and Trader Joe’s, which itself started as a non-branded, cheaper, more natural alternative to traditional grocery stores. (Insider has pointed out that Trader Joe’s is actually cheaper for most things than Brandless, but maybe it’s worth it to avoid the lines there.) There’s also the cost of shipping to consider. For orders over $72, shipping is free; otherwise, there’s a flat rate of $9. If you join the B.More program for $36 a year, you get free shipping when you spend $48 or more. So shipping can tack on extra costs unless you really fill up your cart.

Brandless’s hand cream.

Then there’s Public Goods, which just launched a Kickstarter campaign to raise $20,000. As of this writing, it’s at double that amount with another month to go. Public Goods is exactly the same concept as Beauty Pie, the company started by Bliss founder Marcia Kilgore, which sells high-end makeup and now skincare at cost. When you pay a monthly membership fee, you can buy products that would normally be marked up 300 percent, for just the cost it takes to produce them. Public Goods is doing the same thing, except with more pragmatic items such as shampoo, garbage bags, and toothpaste instead of eyeshadow palettes and face peels. The black-and-white packaging doesn’t look all that different from that generic 1982 “hand soap,” except now it’s chic.

Public Goods originally launched in 2015 under the name Morgans. It was conceived as a grooming subscription box that had recurrent shipments built in. Customers didn’t love this aspect, though, so founders Morgan Hirsh and Michael Ferchak retooled the business last October to be a membership program. (Hirsh notes that they launched their membership/discount concept well before Beauty Pie and Brandless.) The founders then decided to rebrand to Public Goods in order to broaden their offerings and widen their customer base. They have investors on board, and are raising funds on Kickstarter. Like the items sold by Brandless, the products will also avoid controversial ingredients and have a sustainability angle, like toothbrushes made from bamboo.

You’ll be able to join this new non-brand in September. A $12 membership fee will get you access to products that cost the same amount it costs Public Goods to produce them. So like Beauty Pie, the founders make money from the monthly fee, not from marking up the products. Hirsh estimates that many of the products will cost shoppers between $3 and $4, but notes, “If it costs $6 to make, then it will cost [the customer] $6. It just turns out that the cost to [produce] 8- to 12-ounce bottles really is around $3.” Shipping will be free for orders over $25.

Hirsh definitely thinks there’s a point of differentiation between Public Goods’ pricing and Brandless’s pricing. “They need to fit into that $3 price point, while we’re going to make the best possible product. We are basing our brand on making the most beautiful, high-quality product and then charging membership to access that. The value proposition is different.” Public Goods is launching with mostly bathroom products, like shampoo, conditioner, soap, and deodorant, and will expand to household products and groceries eventually.

So is non-branding the new generic? Only time will tell if this model will become a classic or a retail footnote.

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Updated 7/19/17 at 5:45 to remove reference to Brandless selling shampoo, which it does not at this time.