Many businesses and companies sell products and services that they don’t the product, but they use their own trademark to it. Today, we’ll discuss what is white label product; its various types, advantages, disadvantages, and examples.
What is White Label Product?
White-label products are the type of goods that retailers sell under their own branded logo, but they didn’t produce and manufactured by any 3rd party. White labeling happens when the marketers and buyers of the products make the branding request to use their logo, instead of the producer’s logo. The branded logo would make the product appear as if the purchaser or marketer has produced it.
You can easily recognize the white-label products on the racks and shelves of the store. You would see the store name on the product and that’s what many people call store brand as the label said. For instance, the food market in the product line brands them as “365 Everyday Value.”
3rd Party Manufacturer
The 3rd party manufacturer develops the product, and the retailer would sell it under its own name, and it doesn’t even have to market it. It is a good thing that a single retailer can’t manufacture all of the products that it offers. However, the manufacturer would focus on production, and the retailer would focus on marketing and selling. It would also save time, energy, and resources for marketing and production for companies.
Private labels have become a very famous concept among people, it is because many customers are price-conscious and less loyal to their favorite brands. In fact, the growth of private labels has significantly jeopardized the growth of national brands.
Types of White Label Products
Some of the main types of white-label products are as follows;
White-label products may work in any industry, and many big retailers have taken advantage of them very well. Retailers like Walmart and Whole Food have branded themselves by selling the products of 3rd party manufacturers.
Mass Merchandisers & Multinational
TESCO started dividing its customer market and launching a new brand to cater to the needs of every segment in 1998. The white labeling has worked very well for big retailers like Target, and the 10 brands are satisfying the needs and want of customers.
Private label products are not only limited to big retailers and supermarkets, but many electronic manufacturers, smartphones, and computers are also employing this strategy. Many big electronic brands get their products manufactured by a 3rd party and white label their brand name to expand their market share.
In Service Forms
White labeling also works and is applicable in the service industry. In fact, many service-providing firms take advantage of white labeling. For instance, many Banks offers credit card processing service, but they don’t do it by themselves in-house.
Advantages of White Label Product
Some of the main advantages and pros of white-label products are as follows;
Increased Product Line
Many companies employ white-label brands to expand their product portfolio and target more people strategically. It gives you a competitive edge when companies have more things to offer than competitors.
Many third-party manufacturers don’t have the marketing expertise, and when they earn a big contract, and then it guarantees their sales and profit.
Many stores could amplify their profitability by increasing their sales, and it would only happen when the white label products offer low prices than other national brands.
It is significant to mention here many white-label product brands are equally good as many other brands. Often they employ the same production methods and strategies to meet and satisfy the needs and wishes of customers.
Disadvantages of White Label Products
Some of the main disadvantages and cons of the white-label product are as follows;
Copycat is when a company uses the same packaging as the other brand, and it is illegal. The private label brands should differentiate themselves from other brands so that the customers won’t misinterpret them.
Many big retailers push their products on the small competitors in the market. It results in the form when there is only one seller in the market.
With the growth and progress of big retailers due to the white label products, it is becoming difficult for a small firms to enter the market and make a name for themselves.
Example of White Label Product
Costco is one of the leading retail stores in the US, and it made a deal with the other brand Kirkland for private label products. The item mentioned in the contract would be under the packaging of Kirkland and they would appear on the shelves of Costco. However, some of them are as follows;
- Saran Wrap
- Starbucks (SBUX)
- Quaker Oat
- Tyson Foods
Conclusion: What is White Label Product? Types, Pros & Cons, Examples
After an in-depth study of what is white label product; its various types, advantages, disadvantages, and examples; we have realized that white labeling is highly beneficial for your retail business. If you are planning for white-label products, then you should keep in mind the abovementioned guidelines and types.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.