If you’ve never heard of white label products, you’re not alone. Outside of the manufacturing and branding world, white labeling is not a common subject. However, you’ve probably purchased many these kinds of products in your day.
So what are white label products, and how can you potentially use them to leverage your business? Keep reading to find out more.
What is White Label?
White labeling is when a product that’s created by a manufacturer to be sold by many different retailers. Each retailer is able to resell the generic product under its own branding. With white label products, the retailer is free to charge a premium on the product by attaching their existing brand; this is likely dependent on their position in the marketplace.
A prime example of is what you’ve likely purchased in the past would be store brands. Although technically these kinds o f products may appear in any industry, many large retailers have done quite well with them. Companies like Walmart have benefited by selling their own manufactured products with their brand on them.
The product will be labeled with a chain store’s name and logo. However, it most likely was not manufactured or produced by that brand.
What Are the Advantages of White Label Products?
The major benefits of white label products are that it saves companies time, energy, and money in terms of production and marketing costs. There are some great benefits to white label products, for both producers and resellers.
White labeling allows producers to broaden their network of resellers and therefore sell more of their products. By doing this, producers don’t need to invest in marketing strategies like finding customers or understanding their buying habits. As long as they work with reliable resellers, they will get their products out to plenty of customers.
By utilizing products from a different producer or multiple producers, distributors and resellers can create a whole new brand based on white label products, diversifying their offerings and test new products without the need to create another production line.
The Risks of White Label Products
As is the case with any business venture, any advantages will also come with some risks for both parties involved.
As the producer of white label products, you lose the opportunity to promote and market your own business. When consumers purchase your product or service, they won’t see your company name, logo, or any other details about what you do.
A common example of this is the computer hardware and software elements that go into cell phones. The only brand that a consumer identifies with is Apple or Samsung, even though the phone contains multiple white label products.
The biggest risk for resellers who participate in white labeling is liability. If there is any sort of issue with a white label product or service, the reseller won’t know about it until customers file complaints, at which point it may be too late to do much about it.
The reseller is legally responsible for safety regulations, and trademark concerns with a white label product, even though they aren’t directly involved in the manufacturing step of the process.
To help avoid these issues, some distributors and resellers will do product testing and risk assessment on white label products.
What is the Difference Between White Label, Private Label, and Outsourcing?
At this point, you may be thinking that white labeling products sound a lot like private labeling or even outsourcing. While all three of these methods have similarities, there are still differences between them.
White Label Products vs. Private Label Products
The terms “white label products” and “private label products” are frequently used interchangeably in the business world and with good reason. In many aspects, there is no difference between the two terms.
However, “white label” is more commonly used in the software industry, while “private label” is often used for tangible goods like food, toys, bags, clothing, etc.
White Labeling vs. Outsourcing
You can think of white labeling as outsourcing, but with an extra step at the end. With the white labeling process, a company pays another entity to complete a function or job for them, also known as outsourcing. The additional step in white labeling is that once the outsourced company delivers that product or service, the original company then brands the product as their own.
Essentially, if the company that manufactures the product put their own brand and logo on it and then distributed it to the other company, it would be outsourcing. Because the manufacturing company leaves the product without any branding and the other company can add their own, it is known as white labeling.
Types of White Label Products and Services
White label products and services come in all shapes, sizes, and formats. Below are the three main types you’ll find in business.
B2B White Label
Business-to-business (B2B) white-labeling happens when one company produces a product or service and then passes it on to another company to act as the reseller. For instance, the credit card services of L.L. Bean are actually managed by Barclays, not L.L. Bean.
B2C White Label
Business-to-consumer (B2C) white-labeling happens when a business produces a good or service and then sells it directly to the consumer.
A great example of this is Amazon’s Essentials. The products are manufactured by a wide range of companies but then sold to the consumer under the Amazon brand.
White Label Software as a Service (SaaS)
Another popular form of white labeling happens within the realm of software services. Perhaps you’ve noticed some apps you’ve downloaded on your cell phone or tablet look and act similarly, even if the brand itself is different.
This often happens when the software of the app was likely created by the same company, such as LevelUp, and then branded by the company that the app was built for.
Is White Labeling Right for Your Business?
Under the right circumstances, white labeling can help your business go from startup to steadfast. But to make that happen, you’ll need to partner with the right third-party logistics (3PL) company, like Print Bind Ship.
At Print Bind Ship, we can assist your business with manufacturing and production and then add a brand or logo at the end.
We also offer warehousing, shipping, and inventory management, to name a few of our most popular services. For more information, contact us for a free quote today!