White-labeling is a fancy way of saying "reselling as your own product" because the term refers to buying a completed product that you apply your own label to in order to sell again as your own product or service under your own private label.
White-labeling is fairly common in industry, and it’s very common in software. From air conditioners to heavy equipment to digital marketing, white-label products are everywhere without the common consumer even knowing it.
10 reasons why white-labeling is so popular for growth
- No reinventing the wheel
The hard part of developing a product from scratch has already been done.
- More turnaround
By outsourcing the production and maintenance of your white-label product or service, you get to focus your time on sales and customer service.
- High quality product
The white-label company providing you with the product or services specializes in ensuring that you will be competitive in the marketplace with that product.
- Q&A problems are outsourced
If you have problems with a white-label product or service, it becomes your supplier’s issue.
- Less startup costs
Since you are skipping the product development phase and going straight to a market-competitive product, you don’t have to front the bill for all the time and hassle to get to that point.
- Expand product line for small businesses
Launching a new product or service as a white-label reselling company is as easy as shopping and talking to your already existing customers. It is easy to expand your product line when you have suppliers lining up for you.
- Pivot more easily
Adapting your business to new trends or markets is easier with white-label products and services. Many of your product or service updates will happen effortlessly on your part, as that is the work of the white-label provider.
- Lower risk
Resellers have less overhead and potential liabilities compared to companies that try to do it all themselves.
- Greater profit potential
Providers compete against one another to be your supplier, and the potential for profit will be in the favour of the reseller.
- Less headaches
Letting suppliers provide you with material to sell lets you focus your energy on customer relations and developing the parts of your business that are more apt to make money than cause problems and potential liabilities for you to absorb.
Different types of white-labeling niches
Basically, there are two types that can be sold as a reseller: products or services:
- Services offered by white-label companies are for example digital transformation, consulting, content marketing, outsourcing, ISP and cellular service, and various others that you could want to extend to your customers.
- Of course, products can also be white-labeled. Global manufacturing suppliers often look for domestic partners to help them export. These can be things like medical equipment, office software, and industrial wares.
The difference between white-labeling and just being a distributor
In short: white-labeling is better for the seller. Distributorships allow the supplier to capture the brand value, and typically have price points that favour the supplier. Under white-labeling arrangements, you are managing the white-label marketing assets, and retain the brand value to your potential customers. So it's quite easy to get started.
However, white-label companies typically take a much more involved role in servicing customers with the product. There may also be other tail-end operations aspects involved on the seller’s end of the white label supply chain, such as literally stamping or applying a product label, packaging, and final shipment. Some suppliers take care of this for you and can drop-ship directly to your customer as well, but not all white-label suppliers do this.
How this helps you grow your revenue
Most business problems have some kind of white-label solution. You can diversify your product and service line with white-label solutions exponentially faster and cheaper than you can develop a market-competitive solution in-house.
This allows you to have a very wide net to cast so to speak when it comes to satisfying your customers’ needs.
By freeing yourself to focus on sales, and simplifying how you can make solutions for your customers, you shorten the time it takes for you to grow your revenue. You also eliminate the snags that you hit during development and production of new solutions – effectively, this allows you to capture much more opportunities in the market because it allows you to be more flexible with solving your customers’ problems.
