What Is White Labeling? White Labeling Business Model In A Nutshell

A white label product is any that is manufactured by one company and sold under a different brand name by another company. Services can also be white-labeled. In this case, the company purchases a service from another company and then sells the service as its own. White labeling, therefore, involves the production of a good or service that is rebranded and sold under the name of another company. The strategy is named after the white label on a product’s packaging that can be customized with the selling company’s trade dress.

Aspect	Explanation
White Labeling	White Labeling, also known as private labeling or rebranding, is a business practice where a product or service produced by one company is sold under another company’s brand as if it were the latter’s own product or service.
Process	The process involves a manufacturer or provider creating a generic product or service without branding or labels. Then, a reseller or retailer purchases these products and customizes them with their branding, logo, and packaging.
Examples	Common examples include supermarket store brands, where generic products are sold with the store’s branding, and software solutions offered under a company’s brand while being developed by a third-party software provider.
Benefits	– Cost-Efficiency: White labeling allows companies to save on development and production costs by leveraging existing products or services. – Time-Saving: It speeds up the process of launching new products or services, as the core work is already done. – Brand Expansion: Companies can diversify their product offering and enter new markets without extensive R&D.
Challenges	– Quality Control: Maintaining quality and ensuring consistency can be challenging when relying on third-party providers. – Limited Customization: Companies may have limited control over the product’s features and functionalities. – Lack of Uniqueness: White-labeled products may lack uniqueness or differentiation in the market.
Use Cases	White labeling is common in industries like retail, food and beverages, technology, and software. It’s used for a wide range of products and services, including electronics, food products, web hosting, and mobile apps.
Consumer Impact	Consumers often encounter white-labeled products when they see store brands in supermarkets or encounter third-party software solutions. From a consumer perspective, the quality and value of white-labeled products can vary widely.
Regulation	Regulations regarding white labeling can vary by industry and region. Some industries have strict standards to ensure product safety and quality. It’s important for companies to comply with relevant regulations and conduct quality checks.
Strategic Choice	Companies choose white labeling as a strategic option when they want to quickly enter a market, offer a diversified product line, or reduce development costs. It can be an effective way to compete in industries with established players.
Conclusion	White labeling is a business strategy that allows companies to leverage existing products or services and customize them with their branding. While it offers cost and time benefits, it also comes with challenges related to quality control and differentiation.

Understanding the white label business model

Some key components of white labeling:

• The white label business model involves a company selling products with its own branding that were manufactured by others.
• The white label business model has been successfully implemented in many industries. These include coffee, pet accessories, fitness apparel, website hosting, and accounting.
• The white label business model reduces costs for the reseller and allows them to rapidly expand their product range to take advantage of market trends. The model also facilitates a long-term relationship between both parties.

The white label business model is a business-to-business (B2B) approach involving a manufacturer and a reseller. 

There are three core components of the model:

1. First, a manufacturer creates a white label product that has no name, label, logo, or branding.
2. The manufacturer then sells the unbranded product to a reseller who is free to customize the product to suit their brand. In some cases, the same white label product may be sold to multiple resellers. 
3. The reseller then sells the now branded product to its customers. For the white label business model to be effective, it is important customers are unaware of this process.

White label business model product examples

White label products tend to be concentrated in banking, retail, eCommerce, and digital marketing, among many others.

With that in mind, here are a few profitable white label product examples:

Coffee beans

Some coffee producers work with other businesses to produce custom blends and branded packaging.

White label coffee beans normally require a significant investment, but many have found success dealing with reseller Dripshipper which is also fully integrated with Shopify.

Pet accessories

The online pet care market is worth around $232 billion, so there is an opportunity for eCommerce pet accessory companies to profit.

White label products are well suited to pet service businesses that may need to secure alternative revenue streams because of COVID-19.

Accounting

White label products and services are also offered to accounting companies.

Businesses such as BooXkeeping offer accounting-as-a-service, while others such as Bean Cruncher Accounting offer white-label API integration to create more robust and diverse client-facing products.

Fitness apparel and accessories

The pandemic also caused an increase in home fitness items.

Multiple print-on-demand manufacturers are now producing white-label fitness equipment, t-shirts, socks, yoga mats, and water bottles.

Social media fitness influencers can strengthen their brands and make money at the same time by selling customized, white-label goods. 

Website hosting

While hosting is an extremely competitive market, it is also very lucrative with Business Insider expecting it to be worth $154 billion in 2022.

New entrants can still enter the market by bundling multiple white label products together, including hosting, design, SEO services, and add-ons such as live chat software, form builders, and appointment software.

Benefits of the white label business model

The white label business model is a win-win situation for the manufacturer and the reseller. To see what we mean, consider the following benefits:

Cost reduction

The most obvious benefit for the reseller is that the white label business model saves time, money, and effort.

It is ideal for companies with no manufacturing experience or those who want to avoid the expenses associated with product development. 

Responsive expansion

The model also allows a company to rapidly expand its product offering to take advantage of market trends and boost brand visibility.

Since the product is already manufactured, more resources can be directed toward marketing and distribution.

Long-term relationships

Provided consumers remain unaware of the agreement, the while label business model promotes a sustainable relationship between the manufacturer and the reseller.

Both parties share mutual business interests and both have well-defined roles and responsibilities.

Understanding white labeling

The so-called “store brands” found in supermarkets and other retail outlets are in the majority of cases white-label goods.

In this situation, the manufacturer produces the good for the retailer because the latter has an established presence in the marketplace and can sell the good for a more attractive price. 

In essence, white labeling allows the manufacturer to leverage the brand awareness and distribution channels of other companies to increase its sales volume.

For the retailer, avoiding the manufacturing process means more resources can be directed toward marketing.

Businesses types that utilize white label products

White label products tend to be concentrated in the following business types:

Retailers

Companies such as Walmart and Whole Foods offer an extensive range of white label products in various categories.

Walmart in particular has found success selling these products in collaboration with celebrities and social media influencers.

One example is actress Drew Barrymore, who has released a line of cookware in addition to clean beauty products.

Electronics companies

Manufacturers of smartphones, computers, and other electronics also participate in white labeling with affiliated retailers.

The approach has been effective in the electronics industry since many consumers are sensitive to price and look for cheaper alternatives.

Mass merchandisers and multinationals

Big-box retailers such as Target are also proponents of white labeling.

The company uses white-label goods to target specific customer segments across various categories such as clothing, home décor, art and craft supplies, family-friendly food staples, and homeware basics.

The difference between white labeling and private labeling

White labeling is often used interchangeably with private labeling, but there are subtle differences between the two strategies.

White labeling

As we noted earlier, a white label strategy involves the brand being removed from a product or service and replaced by the brand of the purchasing company.

For example, Walmart’s Great Value white label brand is produced by manufacturers willing to display that company’s brand instead of their own.

The retailer of a white label product only has control over what the label looks like.

In other words, the manufacturer determines how the product is made, how it is packaged for sale, and what ingredients it contains.

For this reason, the manufacturer may also sell the same product to multiple retailers to be on-sold under multiple brand names.

Private labeling

A private label strategy also involves a retailer contracting another manufacturer to produce goods on their behalf. 

However, the retailer of a private label product has control over every aspect of the process except the manufacture of the product itself.

This means they control the product ingredients, packaging, distribution, and even production volume.

In addition to being sold directly to consumers, private label products can also be on-sold to wholesalers.

Types of White Labeling

White Labeling Type	Description	Examples
Product White Labeling	Companies rebrand physical products manufactured by another company and sell them as their own.	– Supermarket store brands offering white-label food and household products.
Software White Labeling	Software providers offer customizable software solutions that other businesses can rebrand and market under their own brand.	– SaaS platforms like Shopify offering white-label e-commerce solutions.
Service White Labeling	Service providers offer their services to other businesses, which can then resell those services under their own brand.	– Payment processing companies offering white-label payment solutions to banks.
Print-On-Demand White Labeling	Print-on-demand services allow businesses to customize and brand products like apparel, home goods, and promotional items.	– Print-on-demand companies offering white-label printing services.
Hosting White Labeling	Web hosting companies offer hosting solutions to resellers who can rebrand and sell hosting services to their customers.	– Web hosting companies offering white-label hosting to resellers.
Financial White Labeling	Financial institutions can offer financial products and services, such as credit cards, under their own brand using white-labeled solutions.	– Banks issuing credit and debit cards using white-label cards from payment networks.
Mobile App White Labeling	App development companies provide customizable mobile apps that businesses can brand and offer to their customers.	– App development agencies offering white-label mobile apps to businesses.
E-commerce Platform White Labeling	E-commerce platform providers offer customizable e-commerce solutions that entrepreneurs and businesses can rebrand and use.	– E-commerce platforms like WooCommerce offering white-label online store solutions.
Subscription Box White Labeling	Subscription box companies allow other businesses to create custom subscription boxes with their branding.	– Subscription box services offering white-label subscription box creation.
Consulting and Advisory White Labeling	Consulting firms provide advisory services that other businesses can offer to their clients under their own brand.	– Management consulting firms offering white-label strategic consulting services to other businesses.

Case Studies

Retail and Consumer Goods:

• Supermarket Store Brands: Supermarkets collaborate with manufacturers to produce products with their branding. The manufacturer follows the supermarket’s specifications for product quality, packaging, and labeling.
• Generic Pharmaceuticals: Pharmaceutical companies produce generic medications according to regulatory standards. These medications are then packaged and labeled with various brand names by different pharmaceutical companies.
• Private Label Clothing Lines: Retailers work with clothing manufacturers to design and produce clothing lines exclusive to their brand. The manufacturer handles design, production, and labeling as per the retailer’s requirements.
• Store-brand Electronics and Appliances: Retailers collaborate with electronics manufacturers to create products like TVs and appliances. These products are manufactured to meet the retailer’s specifications and carry the retailer’s branding.
• Private Label Toys and Games: Toy manufacturers create toys and games based on the retailer’s design and quality standards. The retailer then sells these products under their brand name.

Electronics and Technology:

• Carrier-branded Smartphones: Smartphone manufacturers produce devices customized with carrier-specific software and logos. These customized smartphones are sold by the carriers to their customers.
• Store-branded Consumer Electronics: Retailers work with electronics manufacturers to produce consumer electronics and accessories. These products are designed, produced, and branded according to the retailer’s requirements.
• Private Label Laptop and Desktop Computers: Manufacturers produce laptops and desktop computers according to a retailer’s specifications. The retailer then sells these computers under their brand name.
• White-label GPS Navigation Devices: GPS device manufacturers create devices that are sold to different companies, which can customize them with their branding and software.
• Custom-branded Wearable Fitness Trackers: Wearable tech companies allow customization of fitness trackers with a brand’s logo and features. These custom trackers are then sold by different companies.

Software and Digital Services:

• White-label Website Builders: Companies develop website builder platforms that can be customized and rebranded by other companies. These white-label platforms are then offered to users under various brand names.
• Payment Processing Solutions: Payment processing companies offer white-label solutions that businesses can integrate with their systems and brand with their logos and user interfaces.
• Branded Video Streaming Services: Streaming platforms like Disney+ offer white-label versions of their services to other companies, who can then provide them to their customers under their brand.
• Customizable Learning Management Systems (LMS): LMS providers offer white-label LMS solutions that educational institutions can brand with their logos and educational content.
• White-label Email Marketing Platforms: Email marketing software providers offer white-label solutions that marketing agencies and businesses can rebrand and use to send emails to their clients.

Beauty and Personal Care:

• Cosmetics Manufacturing: Cosmetic manufacturers produce makeup products according to a brand’s specifications and branding. The products are then sold under that brand’s name.
• Fragrances: Fragrance companies allow celebrities or brands to create custom fragrances using their formulations. These fragrances are then sold under the celebrity or brand’s name.
• Private Label Hair Care Products: Hair care manufacturers create shampoos, conditioners, and other products that are rebranded and sold by salons and retailers.
• Custom-formulated Spa and Salon Products: Beauty spas and salons collaborate with manufacturers to create customized spa and salon products, which are then used and sold exclusively by the spa or salon.
• Store-brand Personal Care Items: Drugstores and retailers work with personal care product manufacturers to produce products like toothpaste and body wash with their branding.

Key takeaways

• White labeling involves a product or service that is sold and rebranded under the name of another company. Manufacturers produce goods for the retailer because the latter has an established presence in the marketplace and can sell the good for a better price. 
• White labeling is common amongst retailers, electronics companies, mass merchandisers, and multinationals. Walmart and Target are two examples of companies with a diverse white label product range.
• White labeling is often confused with private labeling, but there are subtle differences between the two approaches. White-label product retailers have control over the product label, with the manufacturer controlling all other aspects and potentially selling the same product to multiple companies. Private label product retailers have much more control over product development and the product itself may be on-sold to other wholesalers.

Key Highlights:

• Definition of White Labeling: White labeling involves a product or service manufactured by one company and sold under a different brand name by another company. This can apply to a wide range of products and services, including consumer goods, digital services, and more.
• Key Components of White Labeling:
  • The white label business model entails a company selling products or services with its own branding that were actually produced by another entity.
  • This model has found success in various industries, such as coffee, pet accessories, fitness apparel, website hosting, and accounting.
  • White labeling reduces costs for the reseller, enabling them to expand their product range quickly to capitalize on market trends and fostering long-term relationships between the involved parties.
  • It is a business-to-business (B2B) approach involving a manufacturer and a reseller, consisting of three core components: unbranded product creation, customization by the reseller, and the sale of the branded product to consumers.
• Examples of White Label Products:
  • Coffee Beans: Coffee producers collaborate with businesses to create custom blends and branded packaging, often through reseller platforms like Dripshipper.
  • Pet Accessories: The online pet care market presents opportunities for eCommerce businesses to profit by offering white label pet accessories.
  • Accounting: Accounting companies can utilize white-label products and services, enhancing their client-facing offerings.
  • Fitness Apparel and Accessories: Print-on-demand manufacturers produce white-label fitness gear, catering to the growing demand for home fitness items.
  • Website Hosting: The hosting industry, while competitive, allows new entrants to bundle white label products to provide comprehensive services.
• Benefits of the White Label Business Model:
  • Cost Reduction: Resellers save time, money, and effort, making it ideal for companies without manufacturing experience.
  • Responsive Expansion: Allows companies to quickly expand their product offerings to capitalize on market trends.
  • Long-term Relationships: Promotes sustainable relationships between manufacturers and resellers while maintaining consumer unawareness of the arrangement.
• Understanding White Labeling vs. Private Labeling:
  • White Labeling: The purchasing company’s brand is applied to a product or service produced by another entity. The manufacturer controls the product’s creation, packaging, and ingredients, potentially selling the same product to multiple resellers.
  • Private Labeling: The retailer has more control over various aspects, including ingredients, packaging, distribution, and production volume. Products can also be sold to wholesalers.
• Business Types Utilizing White Label Products: White label products are commonly found in retailers, electronics companies, mass merchandisers, and multinationals. Retailers like Walmart and Target offer diverse white label product ranges.

Related Concepts	Description	When to Apply
White Labeling	White Labeling is a business practice where a product or service is produced by one company (the manufacturer or provider) and then rebranded and resold by another company (the reseller or retailer) under their own brand name and identity. White labeling allows companies to offer a wider range of products or services without investing in product development or manufacturing capabilities, leveraging existing infrastructure, expertise, and distribution channels. It involves customizing the product or service to meet the reseller’s specifications, branding requirements, and target market preferences while maintaining consistent quality and performance. White labeling enables businesses to expand their product portfolios, enter new markets, and enhance their brand presence through strategic partnerships or outsourcing arrangements.	– When expanding product offerings or entering new markets without incurring significant development costs or resource investments. – Particularly in understanding the dynamics of white labeling, such as brand partnerships, product customization, and quality control, and in exploring techniques to implement white labeling strategies, such as vendor selection, contract negotiation, and brand management, to leverage existing assets, extend market reach, and increase revenue opportunities in product development or market expansion initiatives.
Private Labeling	Private Labeling is a form of white labeling where a retailer or distributor sells products manufactured by third-party suppliers under their own brand name and packaging. Private labeling allows retailers to differentiate their product offerings, build customer loyalty, and increase profit margins by offering exclusive or proprietary products that cannot be found elsewhere. It involves collaborating with manufacturers or suppliers to develop customized products or formulations according to the retailer’s specifications, branding guidelines, and quality standards. Private labeling enables retailers to control pricing, positioning, and distribution of their branded products, enhancing their competitive advantage and market differentiation in retail environments.	– When creating exclusive product lines or differentiating brand offerings to attract customers and increase margins in retail or e-commerce businesses. – Particularly in understanding the benefits and challenges of private labeling, such as brand control, supplier relationships, and quality assurance, and in exploring techniques to implement private labeling strategies, such as product development, packaging design, and marketing positioning, to capitalize on market opportunities, strengthen brand equity, and drive sales growth in retail merchandising or brand management initiatives.
White Label Software	White Label Software refers to software products or solutions that are developed by one company (the developer or vendor) and then rebranded and licensed to other companies (the reseller or licensee) under their own brand name and identity. White label software enables companies to offer software-as-a-service (SaaS) solutions, applications, or platforms without investing in software development or technical infrastructure. It involves customizing the software interface, features, and functionalities to meet the reseller’s requirements, user preferences, and industry standards while ensuring compatibility, security, and scalability. White label software allows businesses to launch new software products, extend their service offerings, and generate recurring revenue through subscription-based licensing or usage fees.	– When offering software solutions or digital services under a proprietary brand or platform to meet customer needs or industry demands. – Particularly in understanding the advantages of white label software, such as time-to-market, cost savings, and scalability, and in exploring techniques to deploy white label software solutions, such as customization, integration, and support services, to accelerate product launches, drive customer adoption, and maximize revenue opportunities in software development or digital transformation initiatives.
White Label Products	White Label Products are physical goods or merchandise that are manufactured by one company (the producer or manufacturer) and then sold by another company (the retailer or distributor) under their own brand name and packaging. White label products allow retailers to offer a diverse range of consumer goods, including food, beverages, cosmetics, electronics, and apparel, without the need for in-house manufacturing or production facilities. It involves sourcing or contracting with manufacturers to produce products according to the retailer’s specifications, quality standards, and branding guidelines, while ensuring compliance with regulatory requirements and industry norms. White label products enable retailers to expand their product assortments, control pricing, and differentiate their offerings in competitive markets, enhancing customer loyalty and revenue growth opportunities.	– When diversifying product offerings or building brand equity through exclusive or proprietary merchandise in retail, e-commerce, or distribution businesses. – Particularly in understanding the considerations of white label products, such as product sourcing, quality control, and brand positioning, and in exploring techniques to develop white label product lines, such as supplier partnerships, product development, and packaging design, to meet market demands, exceed customer expectations, and drive sales performance in product management or brand development initiatives.
Reseller Programs	Reseller Programs are partnership initiatives offered by product manufacturers or service providers to enable third-party companies (resellers or partners) to sell their products or services under their own brand names or through their sales channels. Reseller programs allow companies to expand their market reach, drive sales growth, and increase brand visibility by leveraging the distribution networks, customer relationships, and industry expertise of their reseller partners. They involve recruiting, onboarding, and supporting reseller partners through training, marketing support, and sales enablement resources to promote and sell the manufacturer’s products effectively. Reseller programs benefit both manufacturers and resellers by creating mutually beneficial relationships, revenue-sharing opportunities, and value-added services for end customers.	– When scaling distribution channels or expanding market coverage through strategic partnerships or channel sales in product or service industries. – Particularly in understanding the components of reseller programs, such as partner incentives, training programs, and channel management, and in exploring techniques to establish successful reseller partnerships, such as program design, partner recruitment, and performance monitoring, to drive partner engagement, accelerate revenue growth, and optimize channel effectiveness in channel management or partner relationship management initiatives.
Dropshipping Model	The Dropshipping Model is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product using the dropshipping model, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product. Dropshipping enables retailers to offer a wide range of products without inventory management, storage costs, or fulfillment logistics. It involves partnering with dropshipping suppliers or wholesalers to source products, manage orders, and handle shipping and delivery processes on behalf of the retailer. Dropshipping models require efficient communication, inventory synchronization, and customer support to ensure seamless transactions and customer satisfaction.	– When launching an e-commerce business or expanding product offerings without inventory investment or fulfillment infrastructure. – Particularly in understanding the logistics and operational aspects of dropshipping, such as supplier management, order processing, and customer service, and in exploring techniques to optimize dropshipping operations, such as inventory automation, order tracking, and supplier relationships, to streamline fulfillment processes, minimize risks, and maximize profit margins in e-commerce or retail business models.
Brand Licensing	Brand Licensing is a business arrangement where a brand owner (licensor) grants permission to another company (licensee) to use its brand name, logo, trademarks, or intellectual property in exchange for royalty payments or licensing fees. Brand licensing allows companies to leverage the equity, recognition, and goodwill associated with established brands to introduce new products, enter new markets, or extend brand reach. It involves negotiating licensing agreements, defining usage rights, and ensuring brand compliance to maintain brand integrity and consistency across licensed products or services. Brand licensing benefits both brand owners and licensees by generating additional revenue streams, expanding brand presence, and capitalizing on consumer preferences and market trends.	– When extending brand equity or monetizing intellectual property through licensing agreements or brand partnerships. – Particularly in understanding the legal, financial, and strategic considerations of brand licensing, such as licensing terms, royalty structures, and brand positioning, and in exploring techniques to implement brand licensing strategies, such as partner selection, contract negotiation, and brand management, to unlock brand value, drive revenue growth, and enhance brand recognition in brand management or intellectual property management initiatives.
White Label Banking	White Label Banking is a banking service model where financial institutions or fintech companies offer banking products and services under their own brand names, powered by the infrastructure, technology, and regulatory licenses of banking-as-a-service (BaaS) providers or banking platform providers. White label banking enables companies to launch branded banking solutions, including accounts, cards, payments, and lending products, without building or maintaining banking infrastructure, compliance capabilities, or regulatory approvals. It involves partnering with BaaS providers to customize banking solutions, integrate with existing systems, and ensure regulatory compliance while delivering seamless customer experiences. White label banking solutions benefit both financial institutions and their customers by offering innovative, scalable, and cost-effective banking services tailored to specific market segments or customer needs.	– When offering banking products or launching financial services under a proprietary brand or platform to meet customer financial needs or industry demands. – Particularly in understanding the advantages and challenges of white label banking, such as technology integration, regulatory compliance, and customer experience, and in exploring techniques to deploy white label banking solutions, such as platform customization, API integration, and risk management, to accelerate product launches, enhance customer engagement, and drive revenue growth in fintech or banking innovation initiatives.
Subscription Box Model	The Subscription Box Model is a business model where companies curate and deliver themed assortments of products to subscribers on a recurring basis, typically monthly or quarterly. Subscription boxes offer convenience, surprise, and value to consumers by providing curated selections of products tailored to their preferences, interests, or lifestyle needs. It involves designing subscription box concepts, sourcing or manufacturing products, and managing logistics and fulfillment operations to deliver boxes to subscribers’ doorsteps. Subscription box companies leverage data analytics, personalization, and customer feedback to optimize box contents, improve customer satisfaction, and increase subscription retention. Subscription box models span various industries, including beauty, fashion, food, wellness, and entertainment, catering to diverse consumer interests and market segments.	– When creating recurring revenue streams or building customer loyalty through subscription-based product offerings or membership programs. – Particularly in understanding the subscription box market dynamics, such as customer segmentation, product curation, and fulfillment logistics, and in exploring techniques to launch subscription box services, such as box customization, subscription management, and customer engagement, to attract subscribers, retain customers, and drive brand growth in subscription business models or e-commerce ventures.

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