As manufacturers increasingly pivot towards DTC direct sales and hybrid sales models, the "white label product" is a becoming a proven and popular way to sell more. For consumer-facing ecommerce brands, the appeal of white label ecommerce products is clear—imagine being able to sell a product under your own brand, without the hassle of product development or manufacturing. White label products make this possible, and manufacturers are jumping aboard the trend, selling them to distributors, retail stores, and even directly to consumers. In this blog, we'll look at the benefits of adding white label and private label ecommerce products to your lineup.
What are White Label Products?
White label products are goods which are manufactured by one company and then packaged and sold by third party companies under their own brand names. Produced with blank or generic labelling/packaging, third parties can apply their own branding to items, making the end product appear as though it has been made by the brand selling it. This strategy allows any business, whether it’s a small ecommerce startup or a major retailer, to provide a product which aligns exactly with brand identity and audience, with a fraction of the work required to produce that product. Here are three main variations on the concept:
- White Label Manufacturing: This is the process where a product is produced by one company (the manufacturer) but is packaged and sold under different brand names (the retailers). Some manufacturers strictly produce products in “generic” form for this very reason.
- White Label Ecommerce: This term refers to online businesses which sell products under their brand name but don't have to handle the manufacturing process. This can significantly reduce costs and complexity, particularly for small to medium-sized businesses. We wrote more about managing ecommerce costs here.
- White Label Software/SaaS: In the realm of software and SaaS, white label solutions allow companies to rebrand and resell software developed by others. White label SaaS is a booming industry, offering businesses the ability to scale quickly with digital products that have little to zero overhead.
White Label vs. Private Label
The "White label" and "private label" terms primarily refer to who is buying the product, and how exclusive that buyer relationship is. White label products are produced by a manufacturer and rebranded and sold by various retailers. These products can often be sold by multiple retailers under different brand names, even though the products themselves are identical.
On the other hand, “private label” products are manufactured as generics which are then exclusively sold by only one retailer. The retailer might have a closer relationship with the manufacturer, perhaps even with a say in the product's production, design, and packaging. Private label products can be more profitable than white labels for the retailer, as they control more aspects of product creation and marketing. Both strategies offer unique benefits for producers and can provide lots of incentives for driving B2B business.
Benefits of a White Label Sales Strategy for Manufacturer-Brands
White label sales strategies offer a unique blend of advantages for manufacturers looking to expand their markets and amplify their brand presence. This approach empowers manufacturer businesses to seize opportunities in both B2B and D2C sales channels, all while streamlining operations.
- Increased Sales Opportunities A white label approach opens the door to a broader array of sales opportunities. Producers can strengthen their role as a trusted supplier by offering products which B2B buyers can brand as their own, and in the case of exclusive arrangements with one seller, manufacturers can also tap into the private label market. Simultaneously, manufacturers can sell the same products directly to consumers under the manufacturer’s own brand, accessing the D2C market.
- Brand Amplification Through white label manufacturing, producers can see their products spread across multiple brands and platforms, which, although not explicitly advertising their brand, expands their product reach and indirectly boosts their industry presence. We explore how buyer trust and branding intersect here.
- Speed-to-Market Developing a product from scratch takes considerable time and effort. With white label solutions, manufacturers and businesses can reduce this development/production time and accelerate their time to market by eliminating some design, packaging, and marketing needs.
- Operational Efficiency By focusing on the manufacturing process and leaving the branding and marketing to their B2B buyers, manufacturers can streamline their operations. This lean approach results in a more efficient business model. We wrote more about “lean ecommerce” here.
- Increased Profit Margins Lower overhead costs, combined with bulk sales, make white label selling potentially very lucrative. Lower production costs mean manufacturers can sell their white label products at more competitive prices without sacrificing their profit margins, making it a win-win situation for both the manufacturer and resellers.
Benefits of a White Label Sales Strategy for Resellers
The beauty of white label ecommerce for resellers is that it offers retail/resale businesses an opportunity to expand their D2C sales without the heavy lifting. Sellers are able to rebrand, reprice, and resell a product as their own, allowing them to reach new markets without starting from scratch.
- Cost-effective: White label products save on the expenses of product development and production.
- Speed-to-market: D2C sellers can launch products quickly by leveraging the manufacturing capabilities of others.
- Brand building: White labels allow retailers to control branding and marketing, giving them a way to create a unique identity for products, even if they were produced by someone else.
Jumping on the White Label Trend
By leveraging the many benefits of white label product sales, merchant-producers and resellers alike can scale their businesses with minimal overhead. These products open up new revenue streams for selling to distributors and resellers, while offering clients the opportunity to build their own brands more easily. For these reasons, white label/private label selling, sitting somewhere between classic B2B sales and D2C ecommerce, are important trends to watch.
About The Author
Katy Ellquist
Katy Ellquist, Miva’s Digital Marketing Strategist, is an accomplished writer, marketer, and social media analyst who has created sophisticated content campaigns for a broad range of professional clients. She brings to Miva a complex understanding of ecommerce trends and techniques, building upon extensive digital agency experience and a prior role as direct liaison to Miva’s top accounts. Katy is a regular contributor to the Miva blog, covering essential ecommerce topics like design & development strategy, site optimization, and omnichannel selling, with the goal of increasing the actionable knowledgebase of the entire Miva community.
