White label vs private label: What’s the difference?
If you are in the market for a product or service to sell, then private labeling is a great option. But before getting started, it’s important to know what exactly white labeling and private labeling are. In this blog post, we will discuss what they are and how they differ.
What is White Labeling?
A company buys an existing product from another manufacturer and then labels it with the name or logo of a retailer (i.e., Nike sells their sneakers to Sports Authority). The retailer owns the rights to produce that particular product under its own brand name while maintaining the quality standards of the original manufacturer (i.e., Nike).
In the case of clothing, its common to see manufacturers use white label or private label clothing interchangeably for their wholesale clothing product lines that are available to order with low minimums and select customization options.
What is Private Labeling?
A company produces its own product and then labels it with the name or logo of a retailer (i.e., Adidas). The retailer has no ownership rights to produce that particular product under their own brand name while maintaining the quality standards of the original manufacturer (i.e., Nike).
In contrast, for private label products there are typically high minimums in order to be considered as a customer. However, this can also mean higher profit margins because you’re not paying someone else for production costs upfront. Many people who run businesses have found great success in creating their own brands from scratch and selling them exclusively through retailers like Amazon, and other e-commerce channels.
Private Label vs White Label Products: 3 Key Differences
There are three main differences between choosing white labels or private labels.
Private label products cost less upfront but carry similar quality standards to their original manufacturers, whereas there’s a higher upfront cost for manufacturing with white stock products like Nike shoes without any exclusive rights.
The second major difference is the level of exclusivity your product will have to certain markets. With a private label you own your brand and can control who can purchase it at what price in what market; if Nike makes Sports Shoes they may only want them utilized solely by other athletic retailers or select outlets with contracts in place, while international distribution is almost non-existent outside of high paying contract middlemen for the company. On the other hand, with a white label there’s no exclusivity to different markets or customers and your product can be sold anywhere without any limitations.
Another key difference is the level of customization you get with white label vs. private label.
Private label allows you to control the branding of your product and offer as much customization as possible, which is why it’s popular for high-end retailers. You can have various labeling options including but not limited to: font size, color scheme, logo placement… It also gives you 100% ownership of your brand. This choice is the go-to choice for major retail stores and ecommerce giants.
With white labels there are numerous design templates available on their website meaning less time spent designing a unique aesthetic and more time focused on other aspects like marketing or retail distribution channels. This level of simplicity means that even very low budget companies can afford the customizations they want without having to spend extra money with some outside company just to get the look they need! With this option comes no exclusivity so if one retailer goes bankrupt then the other retailers can sell their products as well.
When you should choose Private Label
If you’re looking for affordability and customization options; for example if you’re looking for one standard style of shoe in every size but want them all labeled ‘Your Brand’ rather than Nike then private label would best suit this process. It is also best for businesses looking to create a new product or service without any additional startup costs and grow their own customer base. When you’re just starting out, it’s easier and more affordable to make small batches of products than having to produce thousands at once which can be expensive.
Private label products are also great if your company has no previous brand recognition or distribution channel connections because all you have to do is order your product and the clothing manufacturer will handle everything for you.
When you should choose White Label
White label products are best for businesses who produce large quantities due to their cheaper upfront cost and broader distribution potential since they don’t have any exclusive rights enforced on them. This also allows brands to utilize their existing customer base instead of creating new ones through marketing campaigns which saves money over time while still maintaining brand recognition.
White labeling has fewer customization options and is better suited towards those who are already established in the market and have an established customer base that they don’t want broken up by selling multiple different brands from other companies.
When deciding between white label vs private label it is also important to consider you product price point and marketing strategy.
If your company has high price points, private labeling may be more beneficial since it’s less costly than white labelling but if you’re looking for greater customization options then white labels may be worth exploring. When choosing what type of label to use, figure out what type of business model works best with how much risk you can take on financially in terms of upfront costs vs customization options available within each different option and go from there!
As of 2020, there are over 100 apparel manufacturers in the United States that offer private label clothing programs for retail customers. With so many options available it can be difficult to decide which manufacturing process is best suited for your company. There are two main factors at play here: cost and customization options and how these affect your business model as a whole. When picking which type of label option is right for you, take into consideration what exactly your needs are with regard to branding versus budget constraints or time-to-market requirements.
For example, if you’re looking to produce a new product line based on what your competition is selling, or if you’re looking to offer an affordable product line with a quick turnaround, then private labeling might be the best option for your company. On the other hand, if branding and exclusivity is what’s most important to you in order to compete in your industry, white labeling may better suit your needs.
Final Thoughts on Private Label :
Private labeling is the go-to choice for new brands or companies that want to enter the retail market with a unique aesthetic and no previous marketing experience. The major marketplace platforms like Amazon are not an option for white labels so this leaves out many of your prospective customers but it also means you don’t have any competition! This means more exclusivity, which in turn drives prices up because there’s less supply available on these custom branded items.
If you’re looking to open up your own store then buying private label inventory will be much easier than trying to find someone who manufactures what you need, especially when those suppliers may only produce one product at once! You’ll get 100% ownership of all design, marketing, and distribution decisions while still being able to find a manufacturer for customization.
You may want to seriously consider finding a private label manufacturer if:
-You have limited startup funds
-Your current product lines need expansion
-You don’t have any previous experience selling online or have any offline retailer accounts (this option typically requires more capital and a clear marketing strategy)
Final Thoughts on White Label :
If you’re looking to be a reseller for someone else’s products then white labeling may be better suited. You’ll get the benefit of marketing and branding without having to invest in inventory or pay extra costs like shipping materials. The key difference here is that your profit margin will likely not exceed what it would if you were actually manufacturing the product yourself, but all risks are minimized as well.
You may want to seriously consider finding a white label manufacturer if:
-Your current business model is selling items wholesale on eBay or Amazon Marketplace (this option typically requires less capital)
-You have limited startup funds because purchasing with this strategy allows more time to grow before needing funding from other sources such as banks or venture capitalists
-You want to sell the products you make in your own store with a private label brand rather than as an Etsy seller or Amazon reseller
-Your end goal is not solely profit because this model will allow for more strategic marketing and branding without having to invest significant amounts of money.
So that’s really all there is to it! All white labels are different, so be sure to read through some company profiles before deciding on the right partner for you! Private labeling may also mean something else: finding a supplier who will work exclusively with you even if their product isn’t necessarily superior. In other words, they’ll give special treatment despite being cheaper or less exclusive overall. So think about what you hope to get out of your decision – do you want to create a brand, or is it more important for you to save money and maximize profit?
-TIP: If you’re just starting out on Etsy and want to test the waters before investing in private labeling, try creating your own product lines with generic packaging. This way if they sell well enough that retailers are asking for exclusivity rights or custom branding options of their own, then you can start considering those – but until then there’s no risk!