With white label products and white label solutions, you can take a significant amount of guesswork out of whether your business will succeed. A common misconception when establishing a business is that you have to start from the ground up.
However, this isn’t necessarily the case.
If we told you that you could go to market and start selling now, you’d probably think we were crazy.
With white label products and white label services, you can take already-manufactured products, customize them with your branding, and start making money sooner rather than later.
Going the white label route is a quick and efficient method for becoming your own boss and cashing in – literally and figuratively – on all the hot trends while avoiding the high price tags and potential obstacles of manufacturing products on your own.
So, what is the white label solution, and why is it so popular? Today, we are here to discuss just that.
We’ll cover
What is White Labeling?
Starting a new business or building a brand can be an intimidating process. For the most part, it requires intensive capital and significant time investment. As we said before, this isn’t necessarily true.
Entrepreneurship isn’t pigeonholed to one specific start-up strategy.
With a plurality of industries, products, and services already in circulation, developing an original idea or a unique selling proposition that hasn’t already been done is nigh impossible.
It’s essentially the age-old concept of trying to invent the wheel.
That said, there are multiple routes you can make a profit – with white labelling one of the most effective and efficient when it comes to having you earn money faster.
Essentially, white label products and services are generic re-brandable, re-sellable items produced by one company and rebranded and resold by another.
In this instance, the latter is your business or brand. The term white label is also used interchangeably with another term, private label. However, there are some subtle differences between the two.
Both terms referred to products manufactured by one business only to be relabelled or rebranded by another company or brand.
A private label typically involves products manufactured and branded before being sold by one retailer exclusively—for example, American multinational technology company and retailer Amazon’s product line, AmazonBasics.
Due to the advanced customization and high minimum order requirements, private label products or service tend to be more expensive and are best for brands that already have an extensive customer base and brand following.
In the context of digital marketing and building an eCommerce website, selling white label products can intensely speed up the process of getting your brand name out there. It also allows you to devote further resources to marketing and establishing your brand story and your brand personality without worrying about stock or inventory obstacles.
On the flip side, white labelling grants manufacturers the advantage of finding cost-effective solutions to make their white label products without worrying about marketing costs.
In the context of this symbiotic relationship, it’s a win-win scenario!
Benefits and Drawbacks of White Label Products
While the above example outlines a mutually beneficial relationship between business owners and manufacturers, it is essential to note that, while there are many benefits of going with a white label product or service, there are external factors to contemplate when considering this approach.
Below, we will delve into further detail surrounding the benefits and potential drawbacks of white labelling and selling a white label product or service.
Benefits
They’re Easy and Efficient to Brand
White label products are some of the simplest and most straightforward methods for incorporating new products or services into your business. Since they are typically pre-made and fully integrated, all you need to worry about is adding your business’s particular brand name onto it before marketing.
Adding a feature white label product eliminates the concern for dedicating time, money and other business resources to market research or investing in product development. Instead, that work is already taken care of, and the only thing that’s left is the fun part – adding your branding, identity and personal flair!
They Allow Your Business to Scale
The greater capacity your business has to offer to supply more features, products, and services, the more likely it will attract more prominent clients and customers who need bulk orders or specialized services.
In other words, white label products and services transform your business from a one-stop-shop for specific items to a diversified, full-service company to fulfill the extensive needs of your clients and customers. When done correctly, these clients and customers will keep coming back and will be more likely to recommend your business to their partners and social circles.
They Grant More Time to Focus on Your Sales Funnel
Developing new products and building out services take up a lot of time, occupational resources and money.
As such, you are adding your brand name and customized design on products that are already proven to be successful and in-demand will save you capital and time while avoiding any potential risks in terms of whether the particular item will be popular.
Not only that, but it allows your business to diversify its item selection, thereby broadening your sales funnel through generating and opening new revenue streams.
Negatives
Less Control
Since you’re not technically creating the products yourself, your business has little to no control over the production process when using a white-label strategy.
On the opposing end, producers have less control over how their manufactured items are specifically marketed or distributed.
In this way, it is crucial to maintain a well-established line of communication between these two parties to ensure that everyone is on the same page, with both relinquishing elements of control to the benefit of the other while still coming to an agreement that everyone is happy with.
Potential Liability
Besides having less control, brands may also be required to be on the hook when it comes to being held liable for any potential issues or injuries consumers experience while using the white label product.
This factor becomes especially pertinent when considering outsourcing cheaper manufacturing sources in different regions, states or countries, where the quality assurance and safety standards are less stringent than wherever your business is located.
If the items produced through these means fall short of meeting the legal standards and requirements for distribution in your region, you could potentially be out a lot of money.
Not to mention, if something were to happen to a customer when using your product, your business would be vulnerable to them seeking legal action.
Not Suitable for Smaller Brands
As we stated previously, white label and private label strategies are the most effective for a company that already has an existing brand presence.
Ultimately, white and private label approaches rely heavily on their parent brand’s already-present popularity and a substantial and loyal following.
Without that, the white label strategy is unlikely to be effective.
Even if you have a small yet loyal customer base and want to increase production and diversify your available items, you risk alienating your customers through potential quality changes from switching from self-production to outsourced manufacturers.
Additionally, implementing such strategies comes with a relatively high cost during the initial onset.
While it will result in fewer costs over time, in the beginning, your brand will need to purchase and repackage a large number of products and develop packaging services, requiring a higher investment on capital.
More than anything else, White Label products require substantial brand trust in order to sell. Learn more about Brand Trust in “The Value of Building Sustainable Brand Trust and How to do it.”
Popular White Label Products to Sell
With so many different products and industries currently in circulation, the broad spectrum of available white label products to sell is nearly endless, with some of the most popular including:
Cosmetics
While dozens of makeup and skincare brands occupy the cosmetic industry, it may come as a shock to many that most of the products are created by just a handful of manufacturers. What’s more, several of them feature the same formulas.
These similarities have spurred a new fad within overarching cosmetic trends for consumers to find cheaper, more accessible items or ‘dupes’ that are identical if not incredibly close to the same formula of higher-end, more expensive products.
The best way to break into cosmetics using a white label approach would be to focus on one product, in particular, such as mascara, moisturizer or lipstick, and branch out from there once your company becomes more established.
Tote Bags
As consumers become more environmentally aware and cautious regarding their particular carbon footprint and sustainable practices, the demand for reusable items has been steadily on the rise in recent years.
Because of this, many businesses have invested in stocking branded reusable tote bags and selling them at a discount price to entice consumers to think twice about using plastics. It also serves as a fantastic marketing technique to increase brand awareness.
What better way to get your brand name and image out there than to essentially have walking billboards?
In the context of white label tote bags, they are typically available through print-on-demand companies, creating an easily accessible and relatively cheap initial investment.
Phone Accessories
Most consumers these days have a smartphone device. These pricey pocket-sized items have created an industry within an industry by establishing the need for protective casings and accessories.
After all, many phones cost over $1,000 these days, so most consumers want to protect them from damage as appropriately as possible.
White label phone accessories are widely available, incredibly customizable and cost very little to produce.
In this way, particularly for small businesses or artists looking to sell their work, these accessories illustrate a promising opportunity to showcase your work and amplify your brand.
It doesn’t stop at phones either! Any technology with customizable casing and accessories is also up for grabs, including laptops, tablets, and e-readers, as well.
White Label Distribution Options
Depending on your business’s size, outsourcing production through private label or white label solutions may accomplish one goal but not all. There’s still the matter of offering and delivering the products to your customers.
Below, we’ll outline two of the most efficient ways to do so:
Creating an eCommerce Store
Through the increasing digitization of retail, eCommerce websites and stores are becoming some of the most accessible ways for businesses to extend their reach, connect with their target audience and increase brand awareness.
Now more than ever, consumers expect convenience and speed over everything else.
An eCommerce website is specifically designed to put customer experience first and is fully optimized to drive sales. Creating an eCommerce store also simplifies business structure while eliminating overhead costs of physical retail locations.
Particularly during the COVID-19 pandemic and the various restrictions such as physical distancing and limited capacity allowances, the demand for digital online retailers has never been higher.
If you’re not selling online, you’re not selling to your maximum potential. Here’s why “Why an eCommerce Website is Essential to Grow Your Business.”
Dropshipping
Smaller retailers and businesses just starting out are likely to rely heavily on dropshipping services to ensure that inventory is filled and products are delivered fast and cheaply.
Essentially, dropshipping is an inventory fulfillment model where a company does not store or ship the products they sell in their store or on their eCommerce website.
This model, in particular, is quite popular for distributing private label and white label products from third-party suppliers and manufacturers.
Dropshipping offers increased flexibility by businesses not having to own, operate or ship their own inventory. It also saves them the cost of storing or managing large quantities of merchandise.
This distribution method is likely to be the most appealing to aspiring entrepreneurs who lack the capital to invest in a business upfront or eCommerce platforms that sell items they don’t necessarily make themselves.
Key Takeaways on White Labelling
While white labelling can be an incredibly beneficial and cost-effective way to receive stock cheap and fast, it’s vital to remember that you still need to set your brand apart from the rest and create something uniquely your own.
There’s a very high likelihood that the manufacturers you’re engaging with are creating similar products for your competitors. So, while you have available inventory, you still need to convince consumers to purchase yours over someone else’s.
In this way, investing in digital marketing and other promotional avenues and dedicating resources to developing a unique selling proposition are crucial elements in establishing a clear and concise brand image and message.
As such, white-label solutions allow you to focus on building your brand and selling your services by simplifying the conversion process.
From there, you can focus on what matters most, driving sales!
