White Label Vs. Private Label should sound familiar to anyone who deals with purchasing products and services.
Whether you’re in the apparel industry or any other industry, you’re probably wondering which label is right for you.
In this article, we will discuss the meaning of these two terms, provide examples of each, and explain the similarities and key differences between them.
What Is a White Label?
White label is the process of selling generic products through multiple retailers and various brand styles.
Essentially, white label is a “blank label” so you can’t change the product or the contents of the package, but you can customize the way the product is labeled and packaged.
With white label products, manufacturers can sell their generic products through multiple retailers. Each retailer can then customize the product label to align with the manufacturer’s brand image.
White Label Examples
White labels bring more marketing opportunities to the world because one manufacturer can produce for different brands, and the difference may be just the brand.
A famous example is Kylie Jenner’s beauty brand, which is produced by the private label manufacturer Seed Beauty, which also produces beauty products for ColorPop.
However, there are brand differences, Kylie Jenner is more expensive than ColorPop.
Coffee is a popular product that is sold using a white label sales model.
If you are interested in this product and would like to sell it, please go to the white label coffee bean seller – Dripshipper, which is even integrated with the Shopify store.
T-shirts are one of the most popular product categories.
And it’s easy to create your own branded designer t-shirts, but outsource the production to a white label manufacturer and focus on branding and selling at the same time.
As with T-shirts, you can sell the mug that you design, but buy the product from a white label manufacturer.
You can add your brand logo, customize the design and packaging, or work with a white label manufacturer to create unique merchandise.
You may learn more about White Label Products for details below:
Beginner’s Guide 2022: What is White Label Product? 10 Examples to Sell Online
White Label Products Pros & Cons
Because white label manufacturers are experts at producing merchandise, they can provide fast and affordable order fulfillment for retail customers.
If you want to source inventory without the need for product design and development, white label is a great option.
White Label Pros
Simplicity: White Label does not require any technical skills as the manufacturer is responsible for production.
It allows you to focus on selling: Production is fully delegated to the manufacturer and you can focus on running your business and marketing your brand.
It’s cheaper: white label is cheaper because the manufacturer will produce the formula or design they already produce.
There are no product customization costs, they can mass produce and keep manufacturing costs low.
White Label Cons
It lacks creative control: The design or formulation of a white label product is entirely up to the manufacturer. So, you can’t decide on the composition of the product.
No differentiation: White label products are not unique to your brand. Of course, you can differentiate it by using unique packaging or branding, but the basic design of the product remains the same.
You may learn more about White Label Dropshipping for details below:
How to Start a White Label Dropshipping Business in 2022?
What Is Private Label?
Private label is a practice in which a manufacturer or brand sells its products exclusively to a retailer. The retailer can change the product in certain ways, such as by modifying the size or color.
The retailer is also usually responsible for all marketing, promotion, and branding of the product.
The private label manufacturer produces the product according to the retailer’s specifications, so the product is customized even before it is labeled. This is called private label.
Private Label Examples
Private label provides retailers with the means to differentiate their markets by selling specific products under their brand names.
In most cases, private labels are popular in large markets and supermarkets.
1. Heinz Baked Beans (Tesco Value)
Tesco is a famous supermarket in the UK, where you can find a wide range of branded and private label products.
For example, Tesco sells Heinz baked beans, but also sells Tesco Value baked beans, which are very similar to Heinz baked beans.
2. Amazon Basics (Owned by Amazon)
This private label on the Amazon marketplace is the best-selling private label. Amazon Basics offers a wide range of office supplies suppliers, technology accessories, and home furnishings.
3. Kirkland (Owned by Costco)
Kirkland is a private label and subsidiary of Costco, producing products under the Kirkland Signature brand.
Did you know that Kirkland coffee was “inspired” by Starbucks coffee? It even says “Starbucks Custom Roast” on it.
Private Label Product Pros & Cons
Establish long-term relationships with private label manufacturers who have a vested interest in creating high-quality products for your brand.
Private Label Pros
Creative control: Working with your manufacturer to develop product concepts gives you creative control over the inputs chosen to go into your products and the processes used to make them.
Brand consistency: Private label allow you to choose designs or formulations that are consistent with your brand.
For example, if your brand is health or environmentally conscious, you can use organic or recyclable inputs.
Product differentiation: Private label designs/formulations are unique to your brand because you created them.
So, in addition to your unique branding, you can market its special formulations and other unique features.
Private Label Cons
Longer time to market: Creating a new product formulation/design and testing it before production can be time-consuming compared to using a certified design/formulation.
It requires expertise: You must be quite knowledgeable in product design/formulation in order to contribute to the product development process.
It costs more: Product development, testing, and certification are costly and demanding processes.
Depending on the product, the manufacturer may also charge you for services, such as creating special molds for your product.
You may learn more about Private Label Manufacturers for details below:
Complete Guide 2022: How to Find Private Label Manufacturers?
White Label Vs. Private Label: What Are the Similarities?
There are many similarities between white label Vs. private label.
Both options allow business owners to outsource their production to manufacturing experts, thereby significantly reducing start-up costs and allowing new businesses to enter the market without manufacturing experience.
Here are some of the main similarities between white label Vs. private label:
Both models imply production by a third-party manufacturer and further resale through another company’s custom brand.
Control the Marketing Strategy
In both cases, the retailer is the one who has complete control over the advertising strategy and the entire marketing process, from brand image to customer journey path creation and finally, purchase.
Retailers can provide any name or image they want for the product.
Once the transaction is complete, the manufacturer sells the product or service through either the white or private label model without any trademarks. Both are B2B business models.
So, in both cases, the customer is usually unaware that the product they are buying was actually created by another company.
White Label Vs. Private Label: What Are the Differences?
While there are core similarities between white label Vs. private label, you need to evaluate these differences before choosing the option that best suits your business.
Here are some of the main differences between white label Vs. private label:
Private label allows you to control the product design and specifications of the items you order. This means you can manufacture and sell items that are different from other products on the market.
A white label, means you are buying a product that has already been manufactured. This method does not allow for product customization, except for the packaging.
With the private label method, you need more money for market research and product development.
In contrast, carrying white label products allows you to start with a smaller investment and lower production costs.
With private label products, it is doubtful that other companies will create and sell products that are identical to yours. In addition, manufacturers are not allowed to sell your designs to other retailers.
With white label products, you will be selling the same product from the same manufacturer, except for your own packaging.
Since there are similar products on the market, your competitive advantage lies in customer service, marketing strategy, and pricing.
In the long run, private label can earn you more revenue and brand awareness because you offer exclusive and unique products. However, the profit outlook with private label is slow.
In contrast, white label provides you with generic products that are ready to sell at lower margins because you have to stay competitive with other retailers.
You don’t need a large upfront capital investment, and you can earn revenue quickly if you offer highly sought-after products.
In short, whether you are still in the planning stage of your company or in the expansion stage, using white label or private label products can offer great business opportunities.
With these methods, you can expand your offerings or enter new markets with new product ideas.
White Label Vs. Private Label FAQ
1. What is white label Vs. private label?
The difference between white label Vs. private label is that white label products are generic and sold to multiple retailers who then brand and price the products according to their niche market.
In contrast, private label products are sold exclusively to one retailer and are unique to them.
When selling wholesale coffee and similar products, you must determine whether you want to go with a white label or private label product.
2. How to choose? Private label or white label?
Both private label and white label have their unique strengths, pros & cons, and potential. So, you need to decide what is better for your business.
If you are looking for a long-term brand with an excellent ROI, then private label should be the first choice. But remember, with private label, you need to invest more than white label.
In addition, if you want to bring a unique product to market, private label is the only option. You can customize your products according to your requirements.
3. Start your own business: white label or private label?
Considering the differences listed previously, it is reasonable to conclude that the white label Vs. private label model is applicable to many companies. However, the choice must be made based on business objectives.
Private label is a better choice for small businesses that focus on physical custom goods, while white label is more advantageous for Internet-based businesses, especially in the digital advertising space.
White Label Vs. Private Label Conclusion
White label Vs. Private label offer excellent manufacturing opportunities for retailers. There are pros and cons to using both labels, but there is no need to choose the best one.
You just need to understand and decide what kind of business you have and what kind of products you need.
At Yansourcing, we specialize in managing both label services for our customers. We are a leading sourcing company in China, dedicated to helping our clients source products from China at the most competitive prices.