six brown glass bottles containing beauty products are grouped and all bottles have blank labels illustrating white label

Private Label vs. White Label

As consumers feel the pinch of inflation, many are turning to private retail and grocery labels to help stretch their dollars. Both private and white labeling are lucrative options for eCommerce merchants. Here we weigh the pros and cons so you can decide what's best for your business.

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Looking for a new product to sell? If so, private labeling or white labeling could be a great new business model to dive into. But private and white label products are different from one another — and if you’re an eCommerce seller or retailer, it’s important to know the difference.

As inflation continues to affect shoppers and merchants alike, consumers are turning to private label products to help stretch their budgets.

In this article we’ll talk about the differences between private and white label products, and then highlight the pros and cons of each option.

What Is Private Label?

Private label goods are products that are sourced from a manufacturer or wholesaler and then sold exclusively under a certain brand. Think Walmart’s Great Value brand or Target’s Up & Up brand or Costco’s Kirkland Signature products. The retailer has the freedom to make slight alterations to the product, like the certain ingredients, color, size, etc. to make it unique to their store.

Unlike other name brands (think: Tylenol, Kleenex, etc.), private products are not sold across multiple retailers. Private brands are oftentimes more affordable than name brands, but they can also be sold at a premium price.

What Is White Label?

Brands source white label goods from a manufacturer or wholesaler and sold under many different brands at many different stores.

Every retailer resells the product under its own branding, but they do not make any changes to the product itself. Pricing for these products may vary depending on the specific retailer’s brand and chosen markup.

Private Label vs. White Label

A collection illustrating private label products

Private label and white label goods are both sourced from a manufacturer or wholesaler and then sold under a brand name. The difference is that private label products sell exclusively under one brand, while white label products sell across a number of different brands and retailers. 

Retailers can alter private products to make them unique to their brand. White label products cannot be modified. 

Private Label Pros and Cons

If you’re a product manager trying to decide between selling private or white label products, it can be helpful to weigh the pros and cons. Here are some important things to note about private label products:

Pros

  • Greater customization. Private label products can be completely designed according to the vision of the buyer. The product’s size, color, packaging, labeling, etc. are modifiable.
  • Greater exclusivity. Private products sell under just one brand at just one store or chain. Therefore these products offer a greater sense of exclusivity, which can be appealing to buyers.
  • Can fill a niche. Oftentimes, private label goods fill a unique market niche.

Cons

  • Longer turnaround times. Private label products are customizable. Therefore, manufacturing and time-to-market is longer than with white label goods.
  • More upfront work. Private label products are great for retailers who have ideas on how to customize or alter a product. Merchants not interested in customization need not spend unnecessary time on modification.
  • Branding matters. The success of a private product usually depends on the retailer’s branding and marketing. Customers may be more wary of a store’s brand, unless they have already established trust and loyalty.

White Label Pros and Cons

Just as private label products have pros and cons, white label products have their own benefits and disadvantages. Here are some key things to consider when choosing between private labeling and white labeling:

Pros

  • Faster turnaround times. Because white label products don’t require customization, they have a fast time-to-market and launch in mass quantities.
  • Less upfront work. Manufacturing and selling white label products is more straightforward, since there isn’t any customization.
  • Less upfront investment. White label products are sometimes more affordable to source and purchase.

Cons

  • Less customization options. For retailers that want to be able to make changes to a product, the lack of customization can be a downside of white labeling.
  • No exclusivity. Customers can find the same white label products across many different retailers, meaning the products don’t offer any feeling of exclusivity.

Which Option Is Right for You?

If you’re a manufacturer with an established brand, a big budget and plenty of time to bring a product to market, private labeling can be a lucrative business opportunity. However, if you’re a newer brand looking to bring products to market on a tight budget or short timetable, white labeling may be the best option for you.

In any case, either business model offers an easier, more affordable way to market and sell products without the hassle of product design, development and manufacturing.

Want to learn more about how Scalefast can help your business succeed? Schedule a demo today. 

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