White Label is a collaboration scheme in which one company produces goods without branding, while another sells them under its own brand. This scheme is beneficial to all parties involved. The manufacturer can sell its goods in large quantities without being distracted by marketing and promotion, while the seller has the opportunity to develop its brand by having a reliable supplier. White Label can be found in various industries, from e-commerce to IT services. A typical example of white label is the sale of clothing. The factory produces the clothing, handling all the production processes, while the goods are branded with a completely different company's brand. White label can also be found in supermarkets, where products are sold under the network's brand that it does not produce.
With honest and competent cooperation, white label can lead to the creation of an extremely successful product in the market. This is all thanks to the division of responsibilities, where each party specializes in what they do best. The manufacturer ensures the quality of the goods, while the seller promotes the goods in the market and finds buyers. Each party does its job and satisfies its specific goals, which ultimately results in successful cooperation.
It is desirable for the seller to choose one manufacturer for cooperation, so that the quality of the goods remains stable. By purchasing goods directly from the manufacturer, the seller can set the margin independently, which will have a positive impact on profits. At the same time, it is desirable to agree with the manufacturer on exclusive cooperation. This way, the product will be uniquely presented in the market under a single brand.
Advantages of White Label:
- facilitates the launch of a business for the seller;
- the seller can develop their brand without additional costs of organizing production;
- the procurement cost of goods will be lower thanks to direct cooperation with the manufacturer;
- provides the manufacturer with a stable place to sell their products.
Disadvantages of White Label:
- requires trusting relationships between parties;
- the seller cannot fully control the quality of the goods;
- the manufacturer may collaborate with several sellers at once, making the product non-unique.
