In recent talks with our clients, we have noticed that there is a confusion when it comes to differentiating two terms – white label and private label. This has inspired us to write a bit more about these two types of products and point out key similarities and differences between them. Even though differences are subtle, they still exist and everyone should be aware of them… or at least everyone who is interested in rebranding and reselling other people’s products and services. And, as soon as you read this article, you will see there are many differences when it comes to white label vs private label products. So, if you are interested in learning more about this matter, make sure to keep reading!
What is White Label?
Even though we have talked a lot about white labeling, we will do it once again just to help you see the difference between this type of rebranding and private labeling. You already know that white labeling is when one company is developing services (or products) and then selling them to other companies aka retailers. Then, retailers are rebranding these services and selling them under their name, logo, and brand. Basically, one company is in charge of the creation of products and services, while the other company is in charge of selling rebranded products.
It is important to understand that white label products and services are, in most cases, generic. Experienced manufacturers are developing them and then they are selling them to many retailers, not just one. In addition to this, white label companies predominately exist in the software field. Thus, white labeling experts are creating an unbranded piece of software and are selling it to other companies.
The Origin Of The Term
Since we are already talking about the term white label, we simply have to mention its origin. Did you know that this term comes from the music industry and the era of vinyl records? Yes, you have read it right! Back in those days, when an artist wanted to release a new record, firstly they had to send a promotional copy to local radio stations and popular DJs. These copies had no label on them, not even the artist’s name! They were in completely white sleeves. This is why radio stations and DJs didn’t know whose songs they were playing. It was only a matter of time before people started to call these promotional copies “white labels”. As expected, other industries have started using this term as the years went by.
What is Private Label?
So, now that you know what white label is, let’s clarify the definition of private labeling. Then we will compare white label vs private label. So, what exactly is a private label?
In this business model, manufacturers are producing unbranded physical goods and selling them to a specific retailer. People who are designing and creating the product are doing it according to the reseller’s needs and requirements. Basically, this product is customized even before it gets a new label. Private labeling can be seen mostly in the fashion and beauty industries. However, a lot of household items are also products of private labeling. For retailers, it is much more affordable to get products via private labeling than to produce them on their own.
Many small and new companies opt for private labeling. It can help them beat stronger and bigger brands. This is exactly why private label products are so popular in the fashion industry. It is a common practice where companies create their own brands with similar clothing pieces at a competitive price point. Also, thanks to private labeling, store-branded goods can mimic the appearance of national brands and position themselves as premium brands. For example, Dr. Thunder is the store brand that mimics the famous Dr. Pepper.
White Label vs Private Label – Overview
There are so many things you need to know about white label marketing. However, the ones we have mentioned in this article should be enough for you to make the difference between white and private labeling. The most important thing about these two business models is that both of them are allowing retailers to focus on marketing. They don’t have to worry about the technical part since other people will be in charge of production and development. In addition to this, private label products are more customizable since they are being made according to retailers’ wishes. But, this is exactly why you need to invest more in private label than in white-label products. White label products are more flexible. Manufacturers come up with flexible solutions that can be easily modified if it is necessary.
There is no doubt that both private label and white label can be of use to you. But, if you need to choose one of them, we advise you to choose wisely. If you are a part of the beauty industry or you want to sell clothes, choose private labeling. However, if you want to offer social media services to your clients, you will need to opt for <white label social media solutions>. Do you now understand what are the differences between these two?
Let’s summarize what we discussed in this article! What are the key differences and similarities when it comes to white label vs private label?
The Main Differences
- Third-party manufacturers
- Unbranded products
- Ability to focus on marketing strategy
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Are you interested in selling digital products and services? Then make sure to get in touch with us! With the help of our software solutions, you will be able to sell digital products with ease. Feel free to ask us anything that interests you regarding white labeling and we will gladly answer your questions. At Vendolabs, you will find teams of both developers and top marketers so you can be sure that you will get advice from the best people in these fields. Rely on us and start making sales!