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 opens in new window may struggle to find and win a sustainable pipeline of direct customers opens in new window in the early stages of growth.

One solution is to white label your products or services and supply them for sale by other businesses.

This is known as ‘white labelling’.

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

 

 

What is white labelling, and how does it work?

White labelling is a product or service created by one business that is then sold by one or more other companies, which then use their own branding opens in new window when reselling the product or service to their customers.

White labelling is common in the services sector.

For example, marketing opens in new window software could be created by one company and sold to another, which then rebrands the software and sells it for use by their 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 the service and promotes it.

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

Physical products can also be white labelled.

A product is created by one company, such as a breakfast cereal, which is purchased by another firm that rebrands the product and sells it to their customers.

Specific examples of white labelled products and services are:

• membership, payment, and crowdfunding software
• apps opens in new window and other software
• accessories for technology hardware, such as mobile phone covers
• packaged food and drink products opens in new window.
• clothing, cosmetics, and skincare products
• services such as email marketing opens in new window, search engine optimisation, website design, market research opens in new window and social media management opens in new window.

 

The pros and cons of white labelling

Before white labelling your start-up’s products or services, you should consider several advantages and disadvantages.

 

White label advantages

 

Support business growth

A larger brand that white labels your products or services means you can significantly expand your customer base opens in new window.

It can open up a market of buyers you wouldn’t have been able to access on your own as a new start-up.

 

Regular cash flow

White labelling can mean a steady flow of cash opens in new window from your partner, which you can use to grow your business.

 

Expand overseas

White labelling can help your brand enter new markets opens in new window abroad without many of the costs and regulatory burdens usually associated with exporting.

 

White label disadvantages

 

Weakened brand identity

If your partner achieves substantial success with white labelling your product or service, it can lead to your brand’s identity opens in new window and reputation being watered down.

Customers might recognise the partner as the expert rather than you as the original brand.

 

Reduced control over sales

White labelling means you have less control of where your products or services are sold.

They could end up being marketed to people who conflict with your brand values.

 

Communication problems

As a white label supplier, ensuring you understand your client’s requirements is essential.

Misunderstandings and disagreements can be commonplace in white label partnerships.

 

Tips and advice on white labelling

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

 

Effective pricing

Correctly pricing your products opens in new window or services before you start to promote them for white labelling is crucial.

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

 

Sufficient capacity or stock

Think about whether you can efficiently deliver your product or service.

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

If providing a service to your partner’s customers, are you sure that your team has the capacity to deliver it?

Fail to meet targets and you could risk losing your client.

 

Reach potential partners

If you have a product suitable for white labelling, you can market it to potential partners by listing your business on online manufacturer and supplier directories such as Made in Britain opens in new window, eSources opens in new window, The Wholesaler UK opens in new window and Alibaba opens in new window.

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

You can also join business membership groups opens in new window and trade associations opens in new window to connect with potential clients.

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

White labelling helps small companies compete with larger firms because they can add products or services to their portfolio at a lower cost than creating them from scratch.

If you already have successful white label partners, ask for a testimonial you can publish on your website, social media, and elsewhere.

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

 

Be ready to provide samples

If you are offering a product for white labelling, potential partners 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

Strong communication can be vital to ensure the success of your relationship opens in new window with white labelling partners.

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

Provide resources opens in new window to help them grow and be on hand with support.

 

 

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.