What is a White Label Product?
A white label product is a product that is created by a manufacturer and sold by other sellers under their own branding.
It is called white label, because the label will be offered as blank by the manufacturer, and the seller puts their own label and branding on it.
White Label Product Example
For example, a manufacturer develops a specific formula for a skin product and creates a finished product sample out of it. Then it offers this product to other retail chains to sell it under their own brand names and labels.
So the product will be the same at all stores, but the label on the package will be different at each retailer. This is an example of a while labeled product.
White Label vs. Private Label
There is a small difference between what is considered white label and what is considered private label.
White label products are standardized; i.e. they are offered to all the sellers as is, and they only need to put their own branding on it. Private label products, on the other hand, are manufactured to the specifications requested by the seller, and in many cases even the formula or design is developed by the seller and only the manufacturing part is outsourced to third parties.
This also brings in some limitations and differences to the ordering process, as private label products will usually have higher MOQs, due to the fact that they are made specially for this brand and will not be sold to others. White label products, on the other hand, can have lower minimum ordering quantities, as the bulk will still be achieved through different sellers ordering the same standardized product.
Why Do Retailers Sell White Label Products
Retailers choose to sell white label products, because it allows them to launch products under their own name and branding, without having to worry about the product development, design or manufacturing. They can then use their brand name power, and their existing customer base to market and sell these products.
Since the brand is their own, they can often achieve higher gross margins on these types of products, as they won’t need to pay any other brand owner or supplier. Alternatively, they may also choose to sell the product at a lower price than other brands, and thereby sell more quantities, while still having good margins on the product.
Many influencers & creators have also launched their own branded white label products using this strategy, in order to better monetize their audience through retailing, without having to go through the process of creating those products from scratch.
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