Difference between Private label vs White label products
Private label product and white label product are both used to describe products branded by resellers for sale to the final consumer. Both forms of branding are quite similar to the extent that some people wrongly use the terms ‘private label’ and ‘white label’ in the place of each other. Both terms describe products branded by a reseller, but there are is fine differences between the two labeling. Both are great options for any retailers like you starting an online business.
There are three kinds that you should be concerned about: name or national brands, private labels brands and white label brands. Here is the guide to understand the advantages and difference between Private and White label brands.
What is Private Label?
A private label is a product that can be sourced from manufacture then sold under a retailer’s own brand for exclusive sale.
A private label is a product that can be sourced from a manufacturer then sold under a retailer’s own brand name for exclusive sale. Retailers can modify the product to create their own unique brand. Private labeled products are less expensive compared to national brands and if marketing is done right it has the potential to bring more profit. Due to this fact, private label products are now made according to standards and are required to meet required market regulations before distribution by manufacturers. This has significantly reduced the difference in quality with national or name brands hence improving the popularity of private label products especially across Europe. Private label products are widespread. Private label brands can be found online easily with many sellers on eBay, Amazon and Etsy trading platforms selling such products.
The most important thing to consider while searching for private label products is the manufacturing capabilities of the supplier to create high-quality products and offers low production costs is very desirable, because low costs mean higher the possibility to increase profit margins for the retailer. Many private labelers, therefore, turn to China to source their products. The overall costs are still much lower than you would find when manufacturing in the US or Europe, even though there are extra costs to deal with like shipping fees, tax. However, sourcing products from overseas come with challenges like dishonest suppliers, frauds, and scammers.
What is White Label?
A white label brand refers to any product that is manufactured by one company and sold by another company that puts its own brand and model number on the end product. Unlike in national brands, the manufacturer allows these buyers to resell the product under their own brand.
The name derives from the image of a white label that can be traced to vinyl records. Before records were to be released to the public, often before the official artwork was designed and printed, promotional copies were sent out in a white sleeve to DJs to solicit radio and nightclub play, in an effort to build hype and gauge public interest by the record labels, ultimately to better estimate manufacturing quantities.
This created a situation where certain respected or well-connected DJs would have exclusive copies of material, immediately increasing demand on certain big records. Occasionally this term refers to records whose labels had been torn off or covered with a white label by competing DJs to conceal which records they were using.
For a consumer, it will be like the product belongs solely to the retailer and may have no connection with the manufacturer. Although the manufacturer receives little credit for the product, white label brands still offer a number of benefits. Check out this article “Why A White Label Solution Is Easier Than Building Your Own” at Forbes.
Differences between a white label and private label?
The difference clearly lies in the definition. In the white label brand, the product is distributed by the manufacturer to many suppliers who then resell the product under their own brand.
On the other side, a private label brand is a product produced for exclusive sale by a specific retailer. The retailer can make changes to the product as they see fit.
The second difference is whether it comes to products or services. Private label has begun to identify more with tangible goods like T-Shirts that are sourced from manufacturers and resold under retailers like. However, the white label has become more associated with non-physical items like services or a software. Similar to products, the services and a software are distributed to retailers who resell them as their own.
YouTube is another example of white labeling. Whenever you post any video on YouTube channel you are using their service. They have white labeled their product to you. The same with Wix and other web platforms. The distinction between white and private label becomes especially dim where technology gets involved.
Service providers or product manufacturers may sometimes be allowed to identify themselves with the product or service when using a white label. In such cases, the phrase ‘powered by provider’ is used. The reason is to protect the client from any liability that may come about because of poor performance or issues present in the products. In private label, all liability falls on the shoulders of the retailer who is liable for everything.
Should I use White label or Private Label for my Product?
Building a white product is much easier than creating your own brand. Doing the entire thing by yourself, from startup to customer support to marketing is a lot of work. If it is your first venture you are bound to lose a lot of money learning from first-time mistakes.
Ultimately, white label products are fast and simple to brand, save you a lot of time, money and keep customers happier. In terms of quality, there’s very little distinction between white products and national brands.
Whether you should white or private label depends on the product. But it goes without saying that taking a product that has already been created and rebranding it is far easier than inventing your own from scratch.
If you happen to be considered white or private label products, there are a few things to keep in mind.
First, whether or not you must white/private label products depend on the business. In some industries, people are trying to find less expensive different and in others, they desire a dependable and well-recognized brand.