What is white labeling?
White labeling is a process where one business — “Business A” — produces a product or service that is sold under another business’s — Business B — brand name.
White labeling allows Business B to develop or expand their range of products without having to develop them from scratch.
Though white labeling is used in various industries, including technology, retail, and manufacturing, it’s also commonly used for software development, web hosting, and other digital services.
Why do companies use white labeling?
Businesses use white labeling because it:
- Allows them to purchase generic products from one company and customize those products with their own branding.
- Helps save on costs associated with design, manufacturing, and marketing.
- Provides customers with a wide range of products without having to create each one individually, which can help increase Average Order Value (AOV) and repeat sales.
- Makes it easier for businesses to grow and expand without worrying about running out of stock or being unable to keep up with demand.
For industries such as beauty, cosmetics, and healthcare, white labeling can also help avoid the significant costs associated with product testing.
Disadvantages of white-labeled products and services
In spite of its advantages, white labeling doesn’t come without its downsides:
- It can be difficult to differentiate products from competitors when using generic products.
- Companies may not get the same level of control over production and shipping as they would if they produced their own products.
- If a product contains a defect, it can be difficult to pinpoint who is responsible for the issue.
- It limits brand recognition and loyalty as customers may associate the product with the vendor instead of the company.
- Companies often depend on their vendor’s production capacity and may have limited access to alternative sources.
- It can require upfront investments to customize products with branding and packaging.
Common white-label products and services
The ideal white-label product is one that can be produced in bulk easily and then quickly designed to match a company’s branding.
Some of the most commonly white-labeled products include:
- Clothing and apparel
- Electronics and accessories
- Beauty and cosmetics
- Food and beverage products
- Home goods and decor
- Office supplies and stationery
- Technology products such as software, hardware, or cloud services
- Professional services such as marketing or web design
- Pet supplies
- Automotive parts and accessories
Marketing white-labeled products with Emarsys
Emarsys helps leading brands like Feel Good Contacts, Pizza Hut, and Nike unify data to drive personalized omnichannel marketing that drives business outcomes.