What is white labelling?
White labelling is when the company that creates a product or service removes its brand and logo from the final product and adds the branding requested by the purchaser.
Essentially, the product is made by one company but is sold by another company under its brand name. So you can sell a product under your name, but have another company producing the product.
You can even White Label a service. To do this, you’ll essentially be buying the service from a company, but reselling it to your customers while branding it as your own service.
As an example, store brands that you could get at a supermarket are almost always white-labeled products. A manufacturer makes the product and sells it to the retailer who can then put its own branding on the product and sell it for a higher price.
How does White Labelling work?
The concept of white labelling is vaguely similar to that of dropshipping. You’re essentially selling someone else’s product. The main differences are that in dropshipping you pretty much just collect orders and let the manufacturer fulfill them, while in white labelling, you buy the products, have your branding on them and then sell them to your customers. In a white labelling business model, you could actually have the physical product stored with you instead of the manufacturer directly shipping it to the customer.
When you white label a product, you are marketing it as exclusively your own.
As mentioned earlier, you can also white-label a service. In this situation, you essentially have a trusted partner who has agreed to provide your quality and brand of service for a predetermined rate. A white label service is controlled by a contract which your company controls.
The company that makes the product can white label it for multiple companies, allowing all of them to sell the same product under their own separate brands.
How do you start White labelling?
Here’s the process involved if you want to start white labelling.
- First, you choose the product that you want to white label.
- If it’s a physical product, figure out whether you want to dropship, buy inventory, or use another model like print-on-demand.
- Then you select a supplier.
- If you don’t have a pre-existing brand, you’ll have to create a brand and the branding assets. You’ll submit the requirements to your supplier for them to brand the product your way.
- Now you set up a store and your sales channels.
- And now, you can start marketing and selling the product.
Is white labelling a good idea?
This depends on the type of business that you are in. If yours is a business that has a strong focus on brand building and finds innovative ways to use existing products and technologies, white labelling would be a great idea for you. You would be able to gain a lot of value from it.
It’s most effective when you have the ability to handle branding and marketing, but not to handle production yourself. It’s also a good idea if you want to provide additional products are services that are not the core offerings for your business. This allows you to expand your offerings and get great returns on a rather low investment, especially if you have already built a good reputation while selling your pre-existing products.
For example, if you are a web development company or a digital marketing agency, you could white-label Engati’s chatbot platform, allowing you to offer a chatbot platform that your customers could use to build intelligent chatbots that could help your customers with customer service, lead generation and much more.
What are the advantages of white labelling?
Here are the most significant advantages of white labelling:
1. Saves time
Building a product takes a long time. This could stretch to months or even years, even if you have a highly skilled team. White labelling another company’s product allows you to save months or years of development time. This allows you to go to market much faster, allowing you to start earning profits far earlier than you would if you built your own product.
2. Reduces costs
These costs involved in building a high-quality product could even go up to millions of dollars. You don’t need to spend that money to reinvent the wheel if there already is a great product that you can white-label, allowing you to allocate those resources for other uses.
3. Satisfied clients
When you white-label a product, your customers are getting a high-quality product that has been tried and tested. You aren’t making a new product where you won’t know for sure how well it will perform. You’re selling a product that others have tested and you know for a fact that it works well. This means that your clients won’t end up disappointed with a product that has not been tested enough.
4. Helps you deliver more value
White labelling software and products that complement your current offerings will allow you to cater to even more of your customers’ needs, enabling you to deliver end to end solutions, without forcing your customers to find a third party vendor for solutions that complement your core offerings.
It also helps you open up new streams of revenue.
What are the best white label products?
There are a lot of generic products that you can white label, the best ones for you will depend mainly on the line of business that you are in. For example, a brand that sells protein supplements could white label active wear and brand that sells dog food could even white label pet accessories.
But, if you’re in the software space or looking to start a new brand, white labelling a chatbot platform would be a brilliant option for you.
The global chatbot market is expected to go up to USD 10.08 billion by 2026. 50% of enterprise companies plan to spend more money on chatbots than on mobile apps.
When you white-label the Engati chatbot platform, you get to build your brand on the back of the platform that one the 2021 CODiE Award for the best Artificial Intelligence Driven Technology Solution.
This means that you get to put your branding on a platform with high-powered artificial intelligence and NLP capabilities, allowing you to give your customers the most powerful solution possible.
