What Are White Label Products: Meaning and Opportunities

The white label business model has gained popularity around the world, offering an alternative way to generate income by selling to other businesses.

In the following sections, we explain what are white label products in detail and reveal some of the core benefits and challenges associated with this business model. 

Introduction to White Label Products: Key characteristics

In essence, white label manufacturers produce items for other businesses that put their own branding on the created goods and sell them as their own to the end consumer.

Working with a third-party manufacturer is beneficial for many reasons, but among the most important ones is that one company isn’t forced to handle the entire process from manufacturing to selling. 

Usually, white label manufacturers produce generic products in mass quantities and can partner with multiple customers. Oftentimes, they provide the same product to multiple retailers. However, this doesn’t pose any threats as each retailer adds their own logo and branding, preventing risks of selling identical products on the market. 

How White Labelling Works

At the start of the white label process, a manufacturer creates a final product via mass production. These products can be both physical and digital, including white label software, phone accessories, or essential oils. 

Usually, the manufacturer creates these items in large volumes in order to enjoy economies of scale. However, the products or services remain unbranded.

It’s important to note that oftentimes, resellers must meet minimum order quantities to be able to order from a white label manufacturer. Once the products or services are ready, the reseller can rebrand them as their own and use their sales channels to promote them on the market.

The reseller is responsible for adding their logo, packaging, brand identity, and creating their own branded products. By the time the final product or service reaches the end consumer, it looks as though it has been produced by the reseller. 

Naturally, white labelling enables resellers to quickly enter new markets and save money on research, development, and production. Instead, their main focus is marketing, sales, and customer service. 

White Label vs. Private Label: What’s the Difference?

White label products are often confused with private label products. Although white labels and private labels are similar in terms of manufacturing, they differ fundamentally. 

One of the core differences is that private labelling creates room for more advanced personalisation and customisation. For example, private label brands can usually offer unique recipes, formulas, or designs, enabling them to offer something truly stand-apart for specific retailers.

While both white label and private label branding means producing goods or services for multiple retailers, private labels are specifically tailored to the retailer’s brand and requirements. 

For instance, this could be providing custom artwork for items or working with particular ingredients for the creation of a luxurious skin care product. This attention to detail undoubtedly helps private label products differentiate from the rest but the process is also much more expensive when compared to white labelling.

Overall, а private label product makeс more sense for retailers who can afford to set higher retail prices when reselling the products or services. 

Advantages of White Label Products for Businesses

Given the vast range of benefits that white labelling offers, it’s no surprise that so many big box retailers choose to sell white label products.

Here are the main advantages of this model for businesses.

Speed 

White labelling allows companies to achieve unmatched speed by eliminating the need to spend time on researching and developing items from scratch. Instead, businesses can sell white label products that are directly ready for branding and customisation.

By skipping the most time-consuming components of the manufacturing process, they can simply rebrand an existing product and start selling it immediately. For competitive industries, this is especially important, offering room for competitive advantages. 

Lower costs

In-house manufacturing processes are not just time-consuming but also very expensive. They often require hefty investments in research, manufacturing machines and tools, supplies, and a skilled workforce to create the items. 

By partnering with white label companies, businesses can bring these costs down to a minimum. The only investments required are those related to making a bulk purchase for pre-made pieces. 

Minimal risk

As a result of the above-mentioned, choosing to work with a white label manufacturer is considered a low-risk venture, both from the perspective of costs and failure.

Considering that the purchased products have already been established on the market, the required tests have been completed. This means that retailers can confidently rebrand them and resell them to end consumers with lower risks of product failure. 

Concentration on marketing and branding

Another key advantage of white label products is that it enables retailers to focus on what they do best – marketing and sales.

To generate profits, all you need to do is create a strong brand identity, build a community around your brand, and sell the rebranded products. This creates room for experiments and tests related to your marketing strategy as the rest of your processes are taken care of. 

Access to valuable resources 

Selling white label products inevitably means partnering with a specialised manufacturer (or multiple manufacturers) who offers access to valuable resources such as machinery, skilled professionals, and industry expertise.

In most cases, these companies have already refined their manufacturing processes and have received feedback from the market on what works and what doesn’t. Businesses can leverage white labelling to utilise these assets without having to develop them or acquire them internally. 

Scalability 

Finally, white label branding creates tremendous room for scalability. Based on changing market trends, retailers can quickly adjust order volumes to meet changing demands. 

In industries where business growth can be extremely rapid or in segments with seasonal demand spikes, this is an exceptionally valuable ability. 

Ongoing quality control 

A white label manufacturer can easily guarantee quality across multiple other brands thanks to the reliable quality assurance processes in place. 

Even when working with multiple retailers, white label companies can keep a close eye on control and make improvements where necessary.

Market Trends in White Label Products

To continue thriving, white label companies must adapt to changing market trends and customer preferences. 

Some of the most popular market trends in white label products in 2024 include:

• A vast interest in sustainability and eco-friendly products – as more and more people turn an eye towards sustainability, white label manufacturers must change production methods to fit this new requirement. This new demand is also encouraging businesses to offer white label solutions with green packaging, biodegradable materials, and environmentally-friendly formulas.
• Health-and wellness growth – Products that concentrate on well-being, immunity, and mental health are expected to continue booming. White label brands are capitalising on this trend by offering things like organic and plant-based foods, nutritional supplements, vitamins, and more.
• Digital products – in the highly digital world that we live in today, white label SaaS solutions are thriving and attracting more interest. At the moment, a lot of companies are white-labelling digital tools like eCommerce platforms, CRM systems, marketing automation tools, and others.

Staying up to date with the most recent market trends can dramatically help you improve your white label offering.

Key Industries Utilising White Labelling

Wondering what some of the most popular service offerings and product offerings are in white labelling?

Here are some of the industries where businesses often sell third-party-manufactured goods under their own brand names.

Grocery and retail 

In the grocery and retail segment, grocery stores frequently provide white label products created by third-party suppliers.

These consumer products are marketed under the supermarket’s own branding and can include things like canned goods, snacks, household products, cleaning solutions, and more. 

Beauty and skincare

Beauty and skincare brands also leverage white label products. They usually collaborate with manufacturers for the production of personalised skin care according to the specific needs and requirements of different customer groups.

This enables skincare businesses to offer something for everyone without spending too much time on research and development. 

Fashion and apparel

As an incredibly dynamic and fast-paced industry, fashion and apparel also dramatically benefit from white labelling. 

From fundamentals like t-shirts to affordable accessory pieces like tote bags, popular fashion brands are actively relying on white label manufacturers for production processes. 

If you want to start a clothing brand and sell online, white label fashion pieces are definitely an alternative to consider. 

Electronics 

The electronics industry is also an area where white labelling dominates. 

Electronics companies often rely on white label manufacturers to create smartphones, tablets, and laptops for businesses that can then rebrand them and sell their devices as their own.

Software

Many software companies provide white labelling solutions that can be delivered and personalised according to the needs of other businesses.

One of the most popular examples from this space is Mailchimp – an email marketing solution that provides white label software options to agencies. As a result, their clients can offer email marketing services to end customers, promoting them under their own company brand.

Payment processing 

Believe it or not, payment processing is another great example of a sphere where white labelling takes leading positions. 

A lot of payment gateway providers provide white label processing solutions, allowing companies to take advantage of payment gateways to offer reliable online payments to customers under their own branding. 

Case Studies of Successful White Label Products

To help you understand more about the potential of white label products, let’s look at a real-world example.

Superdrug, one other the UK’s most popular health and beauty retailers, successfully capitalises on white label products. For example, its own-label ranges like B. by Superdrug and Solait have gained a lot of attention on the market. 

Aldi and Lidl are other examples of successful discount supermarket chains in the UK that leverage the power of white label products. Thanks to white labelling, they can provide quality products at lower prices, enabling them to gain a competitive edge and position themselves among the leaders in the industry.

Legal Considerations

Although a white label solution is valuable and beneficial in a lot of cases, there are legal considerations to keep in mind.

For example, if a manufacturer produces similar packaging for multiple consumers, this can be characterised as copycatting, an illegal practice that can create serious legal conflicts.

Intellectual Property rights are among the primary legal issues in white labelling. Make sure you’ve assessed factors like trademark protection, copyright, and patents. 

Also, ensure that you have a clear and well-structured white label agreement that specifically outlines the roles and responsibilities of both the manufacturer and the reseller.

Challenges and Risks

Even if you’ve acknowledged the legal considerations of white labelling, there are several additional challenges and risks worth addressing.

• Quality control: An outsourced manufacturing process can offer advantages but can also mean limitations when it comes to direct quality control.  As a supplier, offering inconsistent quality to end consumers could lead to a damaged brand reputation and an inability to satisfy customers’ needs and expectations.
• Entry barriers for new firms: Without a doubt, white label brands are growing in popularity and are gradually starting to dominate certain markets. This could make it challenging for new businesses to penetrate the market. As a result, competition is limited, meaning that existing firms can manipulate prices.
• Dependencies: By outsourcing the manufacturing process to external partners, businesses can start feeling dependencies. 

For example, in cases where the white label manufacturer undergoes production problems, delays, or operational changes, the customer is likely to feel the negative effects of these processes on their brand.

Conclusion

Selling a white label product as a company can offer numerous perks, enabling you to quickly scale your business, reach new target audiences, and grow exponentially.

If you’ve set your eyes on creating a white label brand or partnering with a white label manufacturer, understanding how this model works and what some of the common challenges are can help you make all the right choices and avoid unexpected situations. 

Frequently Asked Questions

What are the main costs associated with running a white label company?

The main costs associated with a white label company include purchasing white-labelled products from suppliers, customising packaging with your branding, and promoting the products through marketing and advertising. You’ll also need to budget for logistics and shipping, as well as customer support and compliance with regulations.

What are some of the best white label products to sell?

Popular white-labelled products include health and wellness items like supplements, beauty products, fitness gear, tech accessories, and home goods. These categories offer high demand and branding potential, making them ideal for white labelling.

Can white labelling be about selling white label services instead of products?

Yes, white label refers to both products and services. In fact, white labelling is popular in areas like digital marketing, where agencies can start selling services promoted by their company but executed by white label providers. This can include services like creating digital marketing strategies, packaging design by experienced graphic designers, and more.

When is white label branding a good idea?

White label branding is a good idea when you want to quickly expand your product offerings without investing in manufacturing or development. For example, it’s particularly effective for an online store that aims to provide a diverse range of products under its own brand name. By selling white-labelled products, you can offer high-quality goods with minimal risk and overhead, while focusing on marketing and customer engagement.