What is white labelling?

White labelling your start-up’s products or services can help to increase your customer reach and generate extra revenue.

Entrepreneurs running new start-ups looking to scale may struggle to find and win a sustainable pipeline of direct customers in the early stages of growth.

One solution is to supply your own products or services to other businesses, which they can then sell using their own branding.

This is known as ‘white labelling’.

Many service businesses use white labelling, and it is also popular with companies providing consumer goods.

White labelling can help start-up businesses who want to develop a customer base in the initial growth stage.

Alternatively, you may wish to be on the other side of the white labelling process – your start-up could buy ready-made products or services from other companies and sell them using your own branding.

What is white labelling?

White labelling is a business model in which a company or manufacturer creates a product or service and then sells it to other companies, who rebrand and sell it as their own.

The second company will use its own brand, logo, identity, and advertising to make it appear as if it had created it.

Using white labelling helps small businesses save time, money, and energy on production.

White labelling is also common in the services sector.

For example, marketing software could be created by one company and sold to another, which then rebrands and sells it to its clients.

Another example of white labelling is when one firm offers a service, such as web design, to another company, such as a marketing agency, which rebrands and promotes the service as its own.

Once someone buys the service – in this case, a new website – the original company delivers it.

How white labelling works

Both products and services can be white-labelled.

This process involves several steps:

1. production of goods or services – the manufacturer or service provider creates a product or service without branding it, and this could be anything from software to physical products to digital services
2. sale to different companies – the created goods or services are then sold to multiple businesses, often resellers – goods are sold without any branding or with the ability to change branding easily
3. rebranding – the companies that buy these products or services then add their own brand, logo, identity, and advertising to make it appear as if they had created it
4. resell to end customers – the rebranded goods or services are then sold directly to customers under the new brand, with customers often unaware that the product or service is a white-label product.

Some examples of white labelling products:

• white-label electronics (such as smartphones and televisions)
• accessories (such as smartphone covers or water bottles)
• health and beauty products (such as skincare)
• food and drink items (such as breakfast cereal or packaged meals).

Some examples of white labelling services:

• marketing software - the development of software that is rebranded and sold to a client
• offering a website design service
• marketing and rebranding services
• membership, payment, and crowdfunding software
• services such as email marketing, search engine optimisation, website design, market research, and social media management.

Pros and cons of supplying white labelling products and services

Consider the advantages and disadvantages before white labelling your start-up’s products or services.

Advantages of supplying white labelling products and services

• regular cash flow – providing white-label products or services can mean a steady cash flow, which you can use to grow your business
• potential increase in sales – with a larger business or multiple businesses reselling your product or service, you can significantly expand your customer base
• focus on product development – as the supplier, your focus could remain on creating and improving your product or service, and you may not need to invest as heavily in sales and marketing
• expand into new markets – white labelling can help your brand enter new markets abroad without many of the costs and regulatory burdens usually associated with exporting.

Disadvantages of supplying white labelling products and services

• weakened brand identity – if your partner achieves substantial success with white labelling your product or service, it can lead to your brand’s identity and reputation being watered down; customers might recognise the partner as the expert rather than you as the product or service originator
• reduced control over sales – white labelling means you have less control over where your products or services are sold; they could be marketed to people who conflict with your brand values
• communications problems – as a white-label supplier, you must understand your client’s requirements – misunderstandings and disagreements can be commonplace in white-label partnerships.

Pros and cons of reselling white-label products and services

Consider the advantages and disadvantages before buying products and services to sell under your own brand name.

Advantages of reselling white-label products and services

• supports business growth – buying products from a manufacturer or services from a provider means you can quickly expand your brand offering and, in turn, your customer base
• speed to market –businesses can get to market much more rapidly than they would if they were designing and producing a new offering from scratch
• cost and time savings – creating a product is often resource-intensive, requiring investment in time, energy, and access to finance – white labelling can lower these costs.

Download our free guide to making business finance work for your start-up.

Disadvantages of reselling white-label products and services

• supplier dependency – production delays or quality issues from your supplier’s side could affect your business, plus you don’t have as much control over how the product is made
• less control over price – white label products are often sold by many retailers and manufacturers, which may limit your control over the pricing of your product
• less product differentiation – other companies may sell the same product or service under their own brand, making it hard to differentiate your product from others on the market.

What to consider if you are selling a white-label product

Putting your brand name on a white-label product can have implications for your business, as your reputation is linked to the quality and performance of your products.

You may wish to confirm that your supplier has effective quality control processes, and that the product meets your expectations.

Consider thoroughly checking your supplier’s reputation. 

You may choose a reliable business with a proven track record of delivering high-quality products without interruptions.

You may also wish to seek professional legal advice to help ensure you have a comprehensive agreement with the supplier that covers things such as liability and agreement termination conditions.

White labelling vs private labelling

Many businesses also use private labelling.

This is similar to white labelling but has key differences.

What is private labelling?

Private labelling refers to a brand owned by a retailer or supplier who sells products from a contract manufacturer.

The products are made to order and branded with the retailer’s name.

These are also known as ‘own brand’ products.

Private labelling is a popular way for retail chains to sell products under their own name – or a new brand name they have created.

This model allows the seller to control the product branding, pricing, marketing and distribution.

Some examples of private labelling include big supermarkets and retailers such as Tesco and Sainsbury’s, which sell various items under their own private-label brands.

How is private labelling different to white labelling?

The main difference between the two is usually in the customisation of the products.

In private labelling, the retailer often works closely with the manufacturer to create a unique product that is exclusively theirs.

This way, the product is designed to meet the retailer’s requirements.

This allows greater control over product specifications, design, and quality.

A white-labelled product is usually created by a manufacturer and then rebranded by various resellers rather than being exclusive to a single brand.

How to find white-label partners

If you have a product suitable for white labelling, you can market it to potential partners by listing your business with an online manufacturer and supplier directory such as Made in Britain or The Wholesaler UK.

LinkedIn is also an effective tool for finding and reaching out to potential partners.

Consider attending networking events and meet-ups for the sector you’re targeting to meet business owners who might be interested in your products or services.

Think about attending trade shows, such as White Label World Expo.

You can also join business groups and trade associations to increase your brand’s visibility and help you connect with potential clients.

While large companies often use white-labelled products or services, you can also market your products to other small businesses.

If you already have successful white-label partners, ask for a testimonial you can use on your website or social media platforms.

This may help to communicate your quality, expertise, experience, and trustworthiness.

If you know of a company that could benefit from your products or services, consider contacting them directly with a proposal.

Tips for white-label success

Here are some tips on how to find white labelling partners and maintain a good relationship.

Effective pricing

Correctly pricing your products or services before promoting them for white labelling is crucial.

It may be worth taking the time to understand your profit margin to ensure you don’t lose money.

To determine whether your pricing is effective, consider your costs, analyse how your competitors price similar products, and consider testing different pricing strategies.

Sufficient capacity or stock

White labelling can significantly increase the demand for your product or service.

If you provide a product to multiple partners, will your start-up have enough products or a good enough relationship with a manufacturer to create them?

If you provide a service to your partner’s customers, are you sure your team can deliver it?

If you fail to meet targets, you could risk losing your client.

Consider meeting demand with effective inventory management, accurate demand forecasting, and efficient supply chain management.

Be ready to provide samples

If you are offering a product for white labelling, potential customers may shortlist several manufacturers and ask to see a sample before signing a contract.

Be prepared to quickly provide samples if requested.

A delay could mean you miss out on a new client.

Maintain good communication

Assertive communication can be vital to ensure the success of your relationship with white labelling partners.

If you deliver a service or software, have a good onboarding and training process so the partner understands how to use it.

Provide resources to help them grow and be on hand with support.

Understand your market

Think about how you can best understand the needs of your potential clients and their customer base.

Consider conducting market research to understand the industry, market trends, and customer preferences in your clients’ markets.

You could also collect feedback from your clients to understand their business goals and marketing strategies.

Maintaining consistent quality

Whether your white-label business offers a service or product, maintaining high standards builds customer trust and sets you apart from the competition.

To maintain consistent quality, consider implementing quality control processes, providing employee training, or investing in necessary equipment.

Ideas for products to white label

Want to try building a business that white labels products?

Virtually any type of physical item can be white labelled – here are some ideas to inspire you:

• handcrafted products – items such as jewellery, pottery, clothing, or artisanal food products can be white labelled and sold by other brands
• cosmetic products – soaps, shampoos, skincare products, or cosmetics can be created for other companies to rebrand
• eco-friendly products – sustainability is becoming important for many brands – eco-friendly products such as reusable shopping bags, water bottles, reusable non-plastic straws, and more could be an option
• clothes and accessories – t-shirts, hats, bags, water bottles and more can be manufactured and sold to other brands to customise
• food and drink – if you make unique food or drinks, these can be white labelled – this might include gourmet biscuits, craft beer, custom spice blends, or speciality tea
• tech accessories – consider products such as phone cases, laptop sleeves, and portable chargers
• fitness equipment – smaller fitness products like resistance bands, yoga mats, or foam rollers could be created and sold to fitness brands
• homeware – candles, cushions, tableware, smaller furniture items, and home fragrances could all be white labelled.

Remember, all businesses involved in white labelling should comply with relevant industry regulations and product safety laws, so think about seeking professional advice if you need help with these.