White label products are ready-made by third-party manufacturers, which you can brand and sell yourself.
White labelling can be useful if you’re just starting your ecommerce business. It’ll reduce your overheads considerably, let you test the waters and see if it’s worth developing a similar product on your own.
Pros and cons of white labelling
Let’s start with the positives.
- Easy to get going - You don’t need to wait for a product to be developed, like you would if you went for private labelling where you’d be more involved in the design and manufacturing process.
- Cheaper than developing your own product - Using a manufacturer means you don’t have to worry about supply chains or production. And that means you can save money!
- Capitalise off your brand - Not every company can pull this off. But if people buy from you because you’re you, then white-labelling is a great way to take advantage of that. This is why you’ll often see influencers and celebrities use the white labelling option.
- Good way to test markets - Using white labelling can be a quick way to trial new markets and product lines. If it’s successful, you know it’s worth investing time and resources in developing your own product.
And now for the negatives.
- It’s not exclusive to you - Your competitors can sell exactly the same product as you. That means your branding, marketing and customer experience need to work extra hard if you want to set yourself apart. If you want products that are produced exclusively for you, consider private labelling.
- You’re reliant on third-parties - Selling exclusively white-label products means you’re at the mercy of your manufacturer. If they suffer supply chain problems or run out of products for you to sell, you’re in trouble.
- Quality could suffer - You have to trust that the manufacturer you’re using creates quality products. If they produce a bad run of items, it’ll be your logo emblazoned on the packaging, not theirs.
What’s the difference between white labelling and private labelling?
With both private and white labelling, your product is made by a third-party manufacturer. Unlike private labelling, however, white label products are pre-made and you have no say over what goes into making the product. They’re also not exclusive to any one company, meaning your competitors could buy the same product, repackage it and sell it as theirs. Instead, the value you add to the products are through your own branding and customer experience.