A white label service, as a rule of thumb, is the provision of products or services that were designed by a company so that they can be sold to another company as that company's own products or services. If it sounds a bit confusing right now, just keep reading.
In the following sections, you will learn exactly what a white label is, why it is beneficial for business owners, and how to use white label services.
What Is White Labeling?
Imagine that you run a digital marketing agency and you offer email marketing, content marketing, and social media management services. That's a great bouquet of services to offer. Now let's say your clients are increasingly demanding web design, web development, and search engine optimization (SEO) services because they want all their digital needs provided under one umbrella, but you don't have the expertise to provide those services.
You have two options: one, allow your clients to hire another agency to provide the web development and SEO services (and risk losing them altogether to an agency that provides an all-in-one solution) and two, hire specialists in web and SEO services at an extra cost that you cannot afford. But there's a third option.
Option three is to approach a specialist agency providing web design, development, and SEO services and pay them to provide your clients with those services but in your brand name and with your own brand identity. That is white labeling at its simplest.
White labeling is the business practice of rebranding another company's products or services and reselling them to your clients/customers as your own.
Benefits of Using White Label Products and Services
- It is cost-effective: By using white label products, business owners can save significant costs of labor and overhead needed to produce certain products or services. Consequently, this would mean an increase in your bottom line. You are also able to spend time delivering high-quality results on your core business functions while the white label agency focuses on developing their product or service, which you also offer as though it were part of your core functions.
- It makes scaling easy: If you partner with an agency to provide white label SEO and content marketing services in addition to your service offering as a digital marketing agency, you can expand your offerings, attract more customers, and grow your business faster – all without doing any of the technical work.
- It provides another stream of revenue: White labeling also provides another stream of income for businesses. If Brand ABC is popular for its burgers and hotdogs but wishes to tap into the increased demand for dessert cakes in the neighborhood, ABC can white label dessert cakes from Bakery XYZ and brand them in ABC packaging. Customers buy the cakes from ABC and assume ABC has now also started selling dessert cakes.
- White labeling allows business owners to compete with bigger brands: The capacity to offer more products and services while maintaining agility and keeping overhead costs low gives smaller businesses a chance to compete favorably in their industry.
Examples of White Label Services
White label services can be used in nearly any industry. The key is knowing what you need and what the best options are. Some examples of white label services are discussed below, even though the list is not at all exhaustive.
- White Label Software and App Services: White labeling is very popular among software developers. Many software and mobile apps on the market are not produced by the brands whose labels are on them. For instance, most SaaS software is white labeled and allows resellers to brand and offer unique services using such software. An example is ActiveCampaign, a marketing automation software that offers a white label reseller program with its Enterprise plan.
- White Label Sales Support: Big brands do not necessarily have large sales support teams as is imagined. Much of the sales support tasks are outsourced to white label agencies who act as the reseller brand when interacting with customers. For instance, Google outsources email and phone support for AdWords users to a white label agency.
- White Label Digital marketing: Many digital agencies that offer email marketing, social media marketing, content creation, SEO, and pay-per-click (PPC) are offering white labeled products and services to customers. Agencies that create content and sell to businesses for use with the businesses' logo and brand identity are white label marketing firms.
- White Label Creative and Design: This category would include graphic designers, content creators, copywriters, etc. Many creative agencies often purchase content from freelancers which they then rebrand and offer to their clients. These days, editable Canva templates can be purchased and rebranded. Photoshop mockups and video creator apps like Renderforest and Viddyoze also provide white label solutions in this industry.
- White Label Manufacturing: Manufacturing businesses with a technical advantage but with no marketing or distribution capacity will often design products to be branded by third parties. That way, they stay in business and remove the manufacturing burden from the third party.
- White Label Reputation Management: Every brand cares about its reputation and reviews; as such, they are interested in monitoring their business' reputation in real-time. Tools like Vendasta offer rebrandable options that agencies can offer to clients.
How to Use White Label Services
Achieving success with white label services is mostly down to three key factors, among several others.
- Know your market: Before deciding to use any white label service for your business, you must have an in-depth knowledge of your market. What is the demographic of people you are serving with your current products and services? What are their wants, needs, and aspirations? Do they need the product or service you are about to white label? There has to be a genuine demand from your market.
- Put a great sales team together: It wouldn't make any sense to add an offering to your bouquet without a clear strategy to sell the additional product or the team to it.
- Find the perfect partner: This is the most important piece of the puzzle. A white label agency or service provider must be a great fit for you and your own business, otherwise, it is not a good partnership.
Use these steps to achieve maximum results in your white label venture:
- Find the right product: A good product may not always be the right one. The right product solves a business need for your customers, blends with your existing products, is easy to rebrand with your own brand elements, and is likely to be around for a while.
- Verify the track record of the white label provider: When you shortlist the vendors to supply you with a white label solution, you must verify how long they have been in business, how many customers they have (or have served), the scale of their business operations, the viability of them remaining in business long enough to service your own customers, and their operations strategy. Also, you need to verify their reputation. What are people saying about the vendor? Do they have glowing recommendations? A white label agency with a good product but a bad reputation is a red flag.
- Confirm that the vendor has a responsive support team: It is critical when you purchase a white label product/service that there is a support team to help you get started with using the product/service for your customers. Is the team on hand to respond to inquiries, fix errors, and aid in the use of the product/service?
- Establish the pricing model: Each vendor will have a different pricing model. Some require a lot of investment upfront and others require annual commitments instead of a monthly rolling basis. Choose one that works best for you.
- Have fair contracts in place: This is perhaps the most important step in using a white label service. The agreements between you and the white label company must ensure that the terms and conditions are clear and transparent. Ask questions about the minimum lock-in period during which neither party can renege on the contract. This will provide stability for you, your clients, and the vendor. Of course, get an attorney to look at any legal agreements you have to sign.
These steps may change depending on what white label solution you are buying or who you are buying it from, but this is a good general guide to get you on the right path.
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Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always consult with a business consultant to ensure that you're making the best decision for your business.