Selling either private label or white label products is a successful business strategy, but you must first understand how to distinguish between the two to decide which one suits you best.
Private label products and white label products are sometimes used interchangeably (although incorrect) to refer to rebranding readymade products for one’s brand. With both labels, you can sell almost anything under your name to match your branding and marketing strategy.
What is Private Labeling?
A private label product is purchased from a manufacturer and then sold exclusively under the retailer’s brand. For instance, retailers can purchase a private label cosmetic product then make adjustments to it, such as changing the colour or size, to create a personalized brand identity and match their niche.
Private label products are typically less expensive than the ones sold by famous brands and therefore have the potential to generate a big profit if well promoted.
What is White Labeling?
A white label product is one that a manufacturer creates for a variety of retailers to sell. The generic white label product can be resold by any merchant under their name and branding.
Because of their market position, the retailer can charge a premium for white label manufacturing because they can attach their existing brand to the product.
Private Label Vs. White Label
While private labelling and white labelling are similar, there are some differences.
1. Customization
When it comes to white label products, all of the things have already been manufactured before you make a deal with the manufacturer. As a result, the only thing you can change is the packaging.
As for private label products, where retailers can personalize items, you can offer items that appear different to your customers (even if the manufacturer sells a variation of your product to another retailer).
2. Product Exclusiveness
Private label retailers can provide all product details to their manufacturers, which implies that other retailers will be unable to sell similar things.
White label products aren’t distinctive or exclusive because the manufacturers sell identical items to several retailers, not just you.
3. Cost and ROI
Because of the large number of competitors, selling white label products necessitates extensive advertising. Such a business would increase your revenue by many times if all of the marketing techniques are implemented effectively.
You don’t have to spend a lot for private trademarks if you’re trading private label items since you get all the information you need, from product research to product development to marketing.
However, because you will be selling unique and exclusive products, the return on investment is projected to be rather substantial.
4. The Products
Physical things, such as clothes, are regarded to comprise the majority of private label products. Manufacturers make these items, which are then resold by retailers.
White label products are now defined as non-physical items such as services or software that are given to retailers who then resale them as their own.
Advantages of Both Business Models
You won’t have to deal with the difficulties of product manufacturing with either business strategy. You will save both time and money because you won’t engage in product design and creation.
As a result, you’ll be able to concentrate on the marketing and branding the product to your target market without being overburdened.
Private labelling and white labelling are great for sellers who wish to try new items or sell on different platforms because they require less work. It’s also a compelling concept for sellers who want to establish a side business in eCommerce.
In a Nutshell
Both private label products and white label products allow new sellers to establish their own business without having to create separate warehouses or pay employees to work on various tasks so that costs can be reduced.
Working with both labels has advantages and disadvantages, and which strategy is best depends on your business goals. All you have to do now is figure out what sort of business you have and what products you will need for it.
Finally, because every business needs hard work, the sort of product you pick should suit your brand, resources, business goals, and commitment level.