Private label and white label are probably two of the most frequently misused and confused terms in ecommerce. Both describe products branded by a seller, but there are always subtle differences between the two that are always confused. Both are labeling models that offer great options for retailers starting an online business. White label and private label are terms that are often confused and used interchangeably. In this article, we will review the differences and advantages between the two. However, before learning the differences between private label and white label in detail, you need to have detailed information about e-commerce logistics. We recommend you to read our article about e-commerce logistics.
What is a white label?
A white label item is a designer item created by a manufacturer for sale by many retailers. Each retailer is allowed to sell the product under its own name and brand. With white label products, the retailer can charge a premium on the product by adding its existing brand due to its market position. In essence, we can define white label products as follows; White label products are manufactured by a contracted or third-party manufacturer and sold under your brand name.
What is a private label?
A private label product is usually obtained from a manufacturer and then sold under the retailer’s brand name for private sale. Therefore, retailers have the opportunity to modify the product to develop their own unique brands. Private label products are generally cheaper than national brands and have the potential to generate a huge profit if marketed properly. With private label products, you can create a more unique product for your niche. With private labeling, the product is created for private sale by a single dealer. To think about any product, the private label retailer will then have the option to modify it to suit their sales requirements and brand. The modified product is specific to that retailer and comes complete with its logo, name and brand identity.
What is the difference between a white label and a private label?
Even though private labeling and white labeling are similar in many ways, they have their own differences that separate the two. With white labeling, a classic product is created by one manufacturer for multiple vendors. For example, a white-label manufacturer will sell a classic product to 10 different retailers. In the white labeling business, every retailer sells the same product without any changes. Each retailer can rebrand the product as its own brand. This is one of the fastest ways to enter the market. However, it should not be forgotten that there are 9 more retailers selling the same product together with you. In order to overcome this obstacle, a very serious work needs to be done to differentiate your brand.
Private labeled product is specially designed for retailers. It is for him only and all details can be changed according to the wishes of the customer. It is unique to that retailer and comes complete with its logo, name and brand identity. This will take more time than the white label solution, but will allow you to create a product specific to your niche.
Advantages and Disadvantages of Both Business Models
Both models offer inevitable benefits for your brand to be more familiar. Now, we will evaluate the advantages and disadvantages of both models with you.
Advantages of White Label;
- You don’t need to be an expert in anything to sell white label products.
- You don’t need to have any designs, recipes or inventions to sell white label products.
- White label products are generally less expensive than Private Label.
- With this model, you can get more brand recognition.
Disadvantages of White Label;
- You select an existing product manufactured by a manufacturer, but you cannot control or specify any component of the product, such as packaging or shipping. All of these details are determined by the manufacturer.
Advantages of Private Label;
- Although the product is produced by a certain manufacturer, you can control all parts of the product.
- The product will be put on the market as unique and unique to you.
- Its packaging is completely under your control.
- With this model, you can get more brand recognition.
Disadvantages of Private Label;
- To sell private label products, you must have your own product idea.
- To sell private label products, you must consider the increase in R&D competencies.
- Your time to market and the time your brand becomes known is more likely to be longer.
- Private label products are generally more expensive than white label.
How can you decide which one is right for you?
When you need to make a decision on any issue in e-commerce, the most important point is to know and determine your own abilities correctly. If you need to make a decision between white label and Private label, you still have to think in terms of your abilities. If you already have a product idea or design, it will be more efficient for you for Private label. Especially if you have the chance to produce this product yourself, private label will be much more efficient than white label. However, if you want to enter the market faster, if you do not have enough budget for research and development studies, if you do not have expertise in the production phase of any product, choosing a white label will be more efficient for your online store.
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