What Is White Label? Guide to White Labeling (2024)

Some of the world’s most iconic brands sell items that might not be as unique as you think. Their branded products are actually manufactured by an outside company that makes identical products sold under multiple brand names. This widely recognized business model is called white labeling, and it is used in many categories of consumer products.

What is white label?

White label refers to the process of manufacturing generic products and selling them under multiple brand names. White label products may have different logos, branding, packaging, and even different prices, but the basic construction is identical.

White label manufacturers may offer limited product customization options, such as the application of a brand logo or graphic to a product’s exterior. They may also offer discounts to retailers for bulk orders. Other white label services, such as print on demand companies, will ship products directly to consumers after purchase.

White label examples

You can find white label branding across industries. From fashion to technology, products made and sold in bulk by manufacturers are branded and advertised by many retailers.

Coffee

The coffee industry offers a real-world example of white labeling. A number of large-scale coffee producers roast beans in industrial facilities and ship batches of those beans—each of them containing an identical product—to retailers. Some of these retailers sell them via online businesses. Others grind and roast the beans in local coffee shops. The coffee is presented to consumers as custom products, but it all originates from the same white label manufacturer.

Skin care

Skin care is another sector where white label brands are prevalent. Moisturizers, serums, and other skin care products are produced by a single manufacturer and then packaged and branded differently by various skin care companies. Depending on their relationship with a supplier, skin care companies may incorporate a unique ingredient to differentiate their product, but the base formula remains the same.

Software

White label software is a common practice in the tech industry. Companies add their branding to a software application made by third-party programmers and sell it as their own. This is particularly common in the SaaS (software as a service) industry, with core features developed by a single company, then rebranded and sold by various other companies that may add additional features or services.

White label benefits

White label branding has benefits for manufacturers and sellers. Each can focus on their area of specialization (product production, product marketing) and leverage the other’s expertise.

Some of the main advantages of the white label business model include:

• Low barrier to entry. Sellers can enter new markets without knowing the intricacies of producing a niche product.
• Lower cost per unit. A white label manufacturer can bring down per-unit costs with large production runs, selling in batches to many retailers.
• Increased product appeal. While a generic product may function well, branding the product may boost its perceived value.

When is white labeling a good idea?

White label companies can set up a business around an existing product without investing in product development. That means skipping a costly retail process and moving straight to building an online store or selling on social media.

Selling white label products might be a good option if you want to:

• Sell a trending product
• Start a business quickly 
• Start a business with little upfront investment
• Add a branded product line to your retail store
• Capitalize on a prominent market position
• Monetize your blog or social media accounts

What are the drawbacks to white labeling?

With other brands selling the same product as you, one drawback to white labeling is pricing competition. There may be little to differentiate products besides retail price, leading to pricing wars where sellers decrease their profit margins as much as possible to win consumers.

While efficient, white labeling is also a restrictive retail model. White label sellers work within the constraints set by white label suppliers, which often means limited opportunities to fully customize products. For more extensive customization, retailers commission private label products.

White label vs. private label

Private label is a similar manufacturing method to white labeling, but allows for more complex product customization. Private label product manufacturers can accommodate bespoke recipes, formulas, and designs to produce unique items for specific retailers.

Similarities

At their core, private labeling and white labeling use the same business model. A third-party producer makes an item for a retailer, who sells it to a customer under a unique brand.

In most cases, the manufacturer ships the product with a retailer’s branding and customizations applied, leaving retailers to focus on branding, marketing, and maintaining customer relationships.

Differences

Unlike white label products, which are usually the same except for the branding, private label products are unique, tailored to the retailer’s specifications. For instance, a retailer might submit an ingredients list for its skin care product or material and color requests for an item of clothing. This extra level of detail makes private label products distinct.

However, a higher level of customization comes at a cost. The manufacturer needs to adjust production processes to meet the retailer’s requirements. As a result, private labeling is typically more expensive than white labeling (a cost that may be accounted for by setting higher retail prices).

A blank canvas

White labeling is a powerful business model that lets retailers put their brand on proven products. It offers a low barrier to entry and lets you leverage the manufacturing resources of others.

If you can avoid pricing wars and reach customers before competitors, white labeling is one strategy for building a thriving retail business.