White Label Products & Services: Learn What's What & How To Start

Language Of White Labeling

A white label brand refers to instances where a manufacturer creates a basic generic product of service then distributes it to a large number of retailers. This is a fully supported product or service that’s made by one company but sold by another. White label products and services are purchased by the latter company without branding. That way, the retailer can customize the product with their own brand, logo, and identity, allowing customers to associate the product with the reseller. Meanwhile, the manufacturer can focus on finding cost-effective ways to make the product, without concern for the product’s marketing.

Unlike name brands, the manufacturer allows these retailers to resell the product under their own brand. So a white label product is a product or service produced by one company producer that other companies or marketers rebrand to make it appear as if they had made it. White label companies create a product or service so that it can be rebranded by an agency rather than by themselves. Then it’s resold as a white label company’s brand to small and medium businesses.

To the final consumer, it will be like the product belongs solely to the retailers and may have no connection with the manufacturer. Although the manufacturer receives little credit for the product, white label brands still offer a number of benefits.

Common retailers of white label products include electronic companies which tend to sell generic products like TV remotes, computer keyboards, radios, etc. Starbucks is an example of a company that white labels their product for Costco to relabel under the Kirkland brand to then sell to end consumers or businesses.

White label solutions work well for everything from cereal to tickets. Grocery stores sell cereal and other products with their own brand name at a discount to other brands. Similarly, ticket resellers can manage their ticket inventory more efficiently through a white label solution. This also increases distribution so that fans have more choice in where they can purchase tickets.

A Hint Of History

The term ‘white label’ actually originates in the music industry, specifically dealing with vinyl records. Before records were to be released to the general public, often before official artwork was designed and printed, radio station and DJs would receive promotional copies in a white sleeve to solicit radio and nightclub play, as an effort to build hype and gauge public interest by th record labels. Allowing them to better estimate manufacturing quantities. This created a situation where certain respected or well-connected DJs would have exclusive copies of material, immediately increasing demand on certain big records. At times, they would then put white labels on them to prevent competitors from knowing the source of the new music being played. There are several variations, each with a different purpose. Variations include test pressings, white label promos, and plain white labels.

  • ‘Test pressing’ usually has ‘test pressing’ on the label, with catalogue number, artist, and recording time or date, are the first vinyl discs made at the factory. They are produced in small quantities (usually under five copies) to evaluate the quality of the disc before mass production begins.

  • In the U.S., the traditional term ‘white label promo’ (often abbreviated as WLP) refers to a promotional pressing with a white label that has mostly the same text and label logo/artwork as the commercial label, but with a white background instead of the color or artwork found on the commercial pressings.

  • Plain white label’ promotional recordings were produced in larger quantities by bigger record labels, often containing a biography of the ban, to distribute as demonstration discs (“demos”) to music distributors, and radio stations in order to assess consumer opinion.

Currently white label discs are commonly used to promote new artists or upcoming albums by veteran artists. Sometimes white labels are issued to conceal artist identities. Aside from house music and hip-hop, plain white label records aren’t generally distributed to the public.

Technically the name derives from the image of a white label on the packaging that can be filled with the marketer’s trade dress - A legal term of art that generally refers to characteristics of the visual appearance of a product or its packaging that signify the source of the product to consumer - Trade Dress is a form of intellectual property. Today, the term has long since been applied in commerce and marketing.

With technology rapidly on the rise 'white label' is a more commonly used term amongst those in the software industry. Some websites use white labels to enable a successful brand to offer a services without having to invest in creating the technology and infrastructure itself. Many IT and modern marketing companies outsource or use white label companies and services to provide specialist services without having to invest in developing their own product. Many software companies offer white label software to agencies or other customers, including the possibility to resell the software under the customers brand. This typically requires functionalities such as the adaptation of the software’s visual appearance, multi-customer management and automatic billing to the end-customers based on usage parameters.

As a side note, smaller banks also sometimes outsource their credit card or check processing operations to larger banks, which issue and process the credit cards as white label cards, typically for a fee, allowing the smaller bank to brand the cards as their own without having to invest in the necessary business development.

Differences Between White Label & Private Label

Loosely the terms ‘white label’ and ‘private label’ can be used interchangeably. The first distinct difference clearly lies in their definition. In white label branding, the product is distributed by the manufacturer to many suppliers who then resell the product under their own brand. For instance, a manufacturer may distribute electronic accessories like computer keyboards to different retailers. These retailers can resell the identical keyboards as their own brand but without making any changes to the product. On the other hand, a private label brand is a product produced for exclusive sale by a specific retailer. The retailer can alter the product as he or she see fit. For instance, computer keyboards source from a manufacturer can have some added features and modifications to set them apart from other products. The product therefore becomes exclusive to the private labeler.

With white labeled products that same freedom doesn’t exist, because manufacturers sell these products to multiple retailers, who then repackage the product under their own brand name without changing it, and sell it to consumers.

Fortunately white label brands are even cheaper for retailers to buy than private label products, and can generate higher profit margins. Retailers can still use their own specific packaging when they sell white label products, so they don’t lose customer recognition.

Another difference has also come about in a whether or not the term in question refers to a product or service. Private label has begun to identify more with tangible goods like shoes that are source from manufacturers and resold under the retailers brand like. However, white label has become more associated with non-physical items like services or software. Like with products, the services and software are distributed to retailers who resell them as their own.

Websites can make use of private labels to sell services without having to setup the necessary infrastructure. Smaller banks may also outsource certain services such as credit cards or check processing to bigger financial centers. The cards and checks can then be branded as the property of the smaller banks.

A more common example of white labeling is YouTube. Whenever you post a YouTube video you are using their service. They have white labeled their product to you , and you put your own video on their platform and infrastructure. The same with Wix and other web building platforms. The distinction between white and private label becomes especially confusing where technology comes in.

White-label service providers or product manufacturers are occasionally allowed to identify themselves with the product or service. In such cases, the phrase ‘powered by…’ is used. This is done to protect the client from any liability that may come about because of poor performance or issues present in the products. In private label, all liability falls on the shoulders of the retailer.

Private Label Benefits

It’s becoming more and more accepted that building a white label product is much easier than creating your own brand. Doing the whole thing by yourself - from startup, to customer support, to manufacturing, to accounting, to marketing - is a lot of work. It’s best in a complex world to outsource at least some of these necessary steps. If it is your first venture you are bound to lose a lot of money learning from first time mistakes. Ultimately, white goods are quick and easy to brand, save you time and money, and keep customers happier. In terms of quality there is little difference between white goods and national brands. Studies have shown that in taste tests for foods little difference is noted for white products and their more expensive counterparts. Whether you should white or private label depends on the product and the deal on offer. Although, it goes without saying that taking a product that has already been created and rebranding it is far easier than inventing your own from scratch.

If you happen to be considering white or private label products, there are a few things to keep in mind. First, whether you should white/private label or not depends on the industry. In some industries people are looking for a cheaper alternatives and in others they desire a dependable and well recognized brand. This can be further broken down by gender, region, macro-economic development, etc. Research has also shown other interesting trends, such as:

  • Women are especially likely to check out store brands

  • Men are very accepting of generic health and beauty product

  • Fewer people assume a brand name means top quality

Do Diligent Research

There’s a lot of research that can be done before making your final decision. Whether you decide to private label or not, you should ensure you have a dependable manufacturer at hand to get the goods produced. It may be best to get a good third party manufacturer to cut out the hassle of finding your own and invariably making costly mistakes along the way. Annually the ASD Market week convention in Las Vegas offers a wide selection of affordable wholesale products and private label partners.

Why A White Label Solution Is Easier Than Building Your Own

Entrepreneur Drew Gainer, explains in Forbes that sometimes as an entrepreneur with a business problem your first instinct may be to try do-it-yourself solutions. Even though that’s really what entrepreneurship is all about, oftentimes building a customized solution from scratch can be a setup for failure. Constructively building your own business can lead you to:

  • Reinvent the wheel, making mistakes that others before you have already made and mastered

  • Dramatically slow down your time to market, as you try to troubleshoot and increase your learning curve outside your core competency

  • Spend too much money developing tools and solutions that already exist in other formats

  • Missout on resources and expertise in the specific space where you need a focused solution

These pitfalls can be easily avoided simply if you opt for a white label solution, rather than building one yourself.

White Label Benefits To Consider

  1. It’s quick and easy to brand. White label solutions can offer advantages if you’re trying to think of ways to add new features to your business. White label solutions are generally fully integrated and ready-made, which makes branding very easy. As the reseller, you’ll be free from concerns about needing to spend time and money on research or development. You can add your own branding and identity, and continue doing business.

  2. It keeps your customers happier. Your customers have an end goal, and using a white label solution can give them a clear and simple path to reaching it. The extra months (or even years) that it takes to develop your own solution can force customers elsewhere for their solutions. You can avoid this with a prepackaged solution that will meet their needs immediately.

  3. It saves you time and money. Developing a solution from scratch takes a large amount of financial and human capital resources and plenty of time. While a custom solution may seem at the outset to best the best alternative, you may quickly find that the effort derails internal business processes and busts budgets. Even if you think you can build it yourself, it’s important to factor in time for marketing. Remember the time it takes for architecture, design, building, and testing the solution. If you require a fast deployment, cutting corners in any of these steps can leave you even further behind. Efficiency is key, so investing in an existing solution may be more cost-effective in the end.

  4. It allows you to focus on your business’s core competency. In many cases, the solutions that companies hope to build themselves fall far outside of their areas of expertise. It’s not smart to stretch your resources to do something that doesn’t fit within your core competencies. Be sure to look closely at the solution you need and compare it to your available resources to help you decide whether a white label solution would help you reach your goals more effectively. Prepackaged solutions provide an opportunity to trust the experts in the specific space you are focused on, and ovoid making the same mistakes that others have already made.

White label solutions can help you utilize your business’s unique branding to offer a product or service without investing in infrastructure or technology creation around the solution. Allowing you to focus on building your brand and selling your services while simplifying the conversion path for your customers.

Working With Manufacturers

With the white label community growing, there is high demand for manufacturers to produce quality “blank” versions of their products that are ready to be branded, customized, and rush-delivered to your door with days. Retailers can create a personalized product that appeals to their customer and reinforces their brand message. Use keyword research on Amazon to find a niche worth capitalizing on. Within days of dreaming up the initial concept, your copyrighted, one-of-a-kind product could be on Amazon’s bestseller list.

Keep in mind that you can work closely with your manufacturer or vendor to develop custom packaging for your products! Additionally, a great online source for retail packaging is www.bagsandbowsonline.com. You can even get your logo printed on candies, chocolates, dog treats, and more at www.printedcandies.com. If you don’t have a suitable branding design, you can outsource a professional at 99 Designs https://99designs.com/ to create the artwork for you. Again, most white label brands tend to have packaging and an appearance that is generic and unappealing, which could make customers think the product or service is of lower quality than private label brands or national brands. So be sure to take time and be detailed with any of your manufacturers while you both work to come up with quality packaging unique most fitting to your brand and/or product.

A little extra creativity will help you stand out from the growing competition as there are even more white label products being sold. For example a garlic press company thought their product through a bit further and decided to brand their product as ‘The Vampire Crusher,’ selling it in a coffin-shaped case, while their product marketing jokes to keep vampires away. Now this product can be sold as a unique Halloween gift for a large niche of people who like spooky things. It’s also likely that fans will share about their product on social media. There’s continued creativity in perhaps calling wooden spoons ‘wands,’ or bathroom scales ‘fortune tellers.” Similar ideas can be done with pretty much any product you can think of. Get creative in branding for your business, products, and marketing or promotional materials. Think outside the typical use, and audience for each product.

Bottom Line

Whether you’re a small seller or a large company, the key to white label lies in identifying a niche market, sourcing a product, and tying it all together with awesome artwork and packaging. Thanks to a new boom in customization tools, you can create, order, and distribute one-of-a-kind products easily, affordably, and quickly. All you need is access to a computer.

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