What is white label?
White-label products and services are re-brandable, re-sellable items that are produced by one company to be rebranded and resold by another company. White-label providers create a product or service to be rebranded by a reseller company so they can re-sell it as their own product to their end consumers.
This guide will take you through everything you need to know about white label, including the types, benefits, risks, and more.
If you're looking for white-label solutions to resell, check out our 9 White-Label Solutions blog.
Table of Contents
- How white-labeling works
- White-label examples
- Types of white-label
- Why would an agency want to white-label?
- White-label digital marketing software
- White-label marketing digital agency services
- White-label marketplace
- What to look for in a white-label partner
- What to watch out for in a white-label partner
- White-labeling: one last word of advice
How white-labeling works
White-label items are produced by a provider to be rebranded and resold to an end customer. White-labeling gives provider access to a large distribution network through their reseller partners, and resellers can expand their product and service line easily without producing their own goods from scratch. The key of white-label is anonymity, as consumers who buy the end product are not aware that it was originally produced by a white-label provider.
Did you know? Many goods and services are white-labeled and resold by big brand names without consumers even realizing it.
Examples of white-label
Here are a few examples of common white-label situations (there are many different types of white-label, which we define further down):
- Company X, a white-label marketing software provider, sells their marketing software to company Y, an agency, to re-sell.
- Company Y then rebrands the marketing software with their own logo and sells it to company Z to use.
Typically this is a SaaS arrangement and users subscribe and pay on a monthly basis.
In this case, the end user is another business. White-label software can also be sold to end customers, depending on the product and service model of the white-label software supplier and distributor.
Vendasta is an example of awhite-label software provider that sells digital marketing software to agencies and media companies. Our partners rebrand our software with their name and logo, set their pricing strategy, and sell it to their business customers.
- Company A, the digital agency service provider, sells their digital agency services to company B to re-sell.
- Company B then rebrands the services with their own logo and sells it to company C, the end consumer.
- Team from company A fulfills the digital services company C purchased from company B under company B’s brand.
Typically this is a SaaS arrangement and users subscribe and pay on a monthly basis.
In this case, the end user is another business. White-label services can also be sold to end customers, depending on the product and service model of the white-label services supplier and distributor.
Again, Vendasta is an example of a white-label service provider that sells digital agency services to agencies and media companies. Agencies and media companies then rebrand our services with their own branding, set their pricing strategy and sell it as their own to their business customers.
- Company D, a white-label products provider, sells their products to company E, a retailer, to resell.
- Company E then rebrands the products with their own logo and sells it to Bob, the end consumer.
In this case, the end user is an end consumer. White-label products can also be sold to businesses, depending on the product and service model of the white-label products supplier and distributor.
Starbucks is an example of a company that white-labels their product for Costco to relabel under the Kirkland brand to then sell to end consumers (or businesses, whatever you use your Costco membership for, no judgments here).
What is the difference between white-label, private label, co-branding, and outsourcing?
White-label vs. private label
Typically, the terms “white-label” and "private label" are used interchangeably and are the same thing when referring to rebranding software and services. The term “private label” is more commonly used in reference to goods, whereas “white-label” is a more commonly used term amongst those in the software industry. Whichever way you look at it, the product or service that is being sold is made to be rebrandable so that the seller can sell it under their own name to their consumer.
Private label variations
In the fashion industry, for example, private label is a common practice where retailers create their own brands with similar styles of clothing at a competitive price point (usually to offer a similar style of shirt or dress, but for a much cheaper cost). The image below on the left is a Versace dress that retailed for $1,685, while Neimen Marcus offered a similar style for $130. While not exactly the same garment, you get my point. Also in the case of private label goods, some products are white-labeled under the private label for exclusive brands. That being said, there are a few different models or strategies of how private label goods are channeled, but at the end of the day, the private label is branded under the seller whether it is the manufacturer or the reseller of the items.
White-labeling, in the case of software and services, allows re-sellers to achieve a competitive price point (one point that makes it similar to a private label model), without having to add the expenses of manufacturing or coding the software in-house, allowing businesses to focus on their core competencies. All the bang for way less buck.
White-label vs. Co-branding
A product or service can be either white-labeled or co-branded, but not both. Co-branding (as I’m sure you have guessed by the name) is when the original supplier’s brand is added to the product as well as the branding of the re-seller. The method effectively leverages the brand power of the better known brand. This is very different compared to white-label, in which only one brand is featured on the end product or service.
White-label vs. Outsourcing
This one can be more tricky. Outsourcing is paying someone else to do a function for your business, whether it be a one-time thing or a continuous service. A service or production of a product can be outsourced and may or may not be white-labeled. It's only white-labeling if you buy a product or service and then sell it to others with your brand name on it.
For example, if you wanted to outsource your digital agency function, you are simply outsourcing your digital agency services under your own brand. But, if you wanted to outsource your digital agency services to another company and sell the services under your company’s brand, you are outsourcing and white-labeling. Now, if you wanted to keep your digital agency services in-house and sell the services under another company’s brand, you are outsourcing and not white-labeling.
Types of white-label products and services
Here is a list of some common types and related terms:
- B2B white-label: products or services provided by a white-label company that sells their products or services to a re-seller that resells it to the end user, another company.
Example: Vendasta creates white-label digital marketing solutions that our agency partners rebrand and resell to their business clients.
- B2C white-label: products or services that are resold by a company and sold to the end user, which is a consumer or person.
- White-label SaaS: a.k.a software as a service. Rebrandable software that is licensed on a subscription basis and is hosted over the internet (no downloads required). Re-sellers brand the software as their own and sell it to the reseller's clients. Disrupted the traditional software delivery method where users would have to buy a subscription on a yearly basis. Offers more evenly distributed returns on a monthly basis = more cash flow.
Specific white-label offerings:
- Content: written copy (blogs, ads, web copy, case studies, ebooks, email copy, etc) produced anonymously that is offered as a product or service package, branded under a business’s name and resold to an end-user.
- Dashboard: rebrandable dashboard on white-label software that is provided to the reseller's clients so they can manage multiple solutions from one location.
- Digital advertising: rebrandable digital advertising services that build SEM (search engine marketing) and social advertising campaigns for reseller's clients under the reseller's brand.
- Digital agency: rebrandable managed digital marketing services for reseller's clients. White-label agencies vary in services provided, but can range from online advertising, reputation management, listings management and social marketing solutions.
- Digital marketing: rebrandable digital marketing products or services for reseller's clients.
- Listings management: listings and citation management software that is outsourced but branded as the agency’s own. The agency marks up their selling price and sells the listings management software to the agency’s clients. The listings management software is provided by white-label software provider.
- Marketing software: rebrandable marketing software platform that the re-seller brands as their own, mark up their prices and resell to their clients.
- Marketplace: rebrandable marketplace where re-sellers can curate a selection of digital products, apps, packages and solutions to their clients as their own. Many products are rebrandable, allowing them to provide clients with the best tools while maximizing their brand’s exposure.
- Platform: rebrandable software platform that the re-seller brands as their own, marks up their prices and is resold to the reseller's clients.
- Products: a product that is manufactured by one company and resold by another company under their brand.
- Reputation management: online reputation management software that is outsourced but branded as the agency’s own. The agency marks up their selling price and sells the reputation management software to the agency’s clients. The reputation management software is provided by white-label software provider.
- SEO: SEO software or service that is outsourced but branded as the agency’s own. The agency marks up their selling price and sells the SEO software to the agency’s clients. The SEO software is provided by white-label SEO software provider.
- Services: rebrandable services that re-sellers sell to their end-user clients, fulfilled by the white-label service provider.
- Social media management: rebrandable social media marketing software that agency re-sellers sell to business clients. Allows businesses to grow their fan base, increase engagement and share relevant content across all social media channels from a single location.
- Websites: re-sellable, easy to use website creation platforms or services that sold to web design and development agencies.
Why would an agency want to white-label?
Four primary reasons
In this section we will discuss the different reasons a business would want to white-label, as well as the pros and cons of reselling software and services. There are many reasons an agency may want to consider white-labeling digital marketing software and/or digital marketing services, including:
1.) You want to expand your offerings (and quickly)
Whether you want to attract new customers, keep the ones you have (reduce churn), or increase your basket size from your current customers, white-labeling allows you to increase the scope of your current offerings. You may be an agency that specializes in reputation management, but your customers are asking for websites or SEO. How does one just jump into that?
2.) You want to land both more and bigger clients (scale, scale, scale)
This point plays into the previous point slightly, but if you can offer more products and services, the more you will be able to attract the attention of bigger fish in the pond who need more than just one digital product or service fulfilled. You no longer want to be a one-stock shop, but a full-service agency that can be a one-stop shop that fulfills your clients every need, and so well, that they keep coming back.
3.) You want to enhance your company’s brand (be seen as a serious competitor)
You want to add more products and services, but you want to do this under your company’s name. How weird would it look if you started offering SEO products or services under another brand’s name? Your customers may be a little confused and could lose trust in your business. Your clients come to you because they trust you and putting your trusted brand name on a white-label product or service not only puts your brand name out there more, it further enhances your reputation as a trusted industry player.
4.) You want to get back to focusing on your core competency: sales (keep that sales funnel going)
Developing a new software program or a new service takes a lot of energy and time, especially if you don’t know how to go about developing a program or how to develop the new service you want to offer. Adding your label to a proven software or service (do your due diligence to make sure it is our guide will help), will save you a lot of risks, capital and time… things that many agencies or businesses for that matter do not have in excess.
Pros and cons of choosing a white-label strategy [Infographic]
White-label digital marketing software
If you are wondering if white-label digital marketing software is the right move, this section is for you.
4 benefits of white-label digital marketing software
1.) You benefit from your partner’s experience and resources
There are fantastic solutions out there already from companies that have been in the game for a while. They have had a lot of time and experience developing their software and have been continuously improving it from the get go. If you can white-label that software, then your agency is benefiting from their track record, experience in the space and ability to move forward in confidence with a strong solution. Developing software can be a risky endeavor and requires a lot of resources to build, maintain and improve.
2.) You can expand your offering quickly, leaving you more time to focus on growing your business
White-labeling allows you to offer a product with your branding on it relatively quickly. After completing on-boarding and training you can start selling the software as your own. Bypassing all of the extra legwork required to develop your own software frees up your time and energy for you to focus on what you do best: helping your customers and selling. If you are white-labeling more than one product, then you are expanding into more markets and are able to sell more products to your current customers, thus increasing your breadth and depth. This allows you to scale and grow your business much faster than trying to develop software yourself, all with very few barriers to entry.
3.) You can achieve a steady cash flow with a SaaS incremental revenue model
While we have all grown accustomed to paying a yearly fee for software, cloud-based computing and software accessed over the internet has gone away with purchasing a yearly software license and companies now charge monthly for software products. It may seem a little scary that a customer could leave on a monthly basis instead of a yearly basis, but this distribution of monthly recurring revenue helps keep your cash flow steady. Offering additional products and killer customer service will help keep your customers coming back to you. Also, allowing them to pay the costs monthly helps their cash flow too so it is a win-win for everybody.
4.) Your partner wants you to succeed: your success is their success
Your white-label partner wants to see you succeed because your success is ultimately their success. If you are able to make a business of reselling their software, you will likely continue to be a customer — and your white-label partner wants to keep you as a customer! Therefore, they are (or at least should be) there to help you with whatever you need to keep selling and growing your company, as a true partnership should. This includes training, support and materials to help you stay an expert on the software, as well as marketing materials to help you pitch to your customers. Be prepared to create some of the content yourself, but your partner should give you a healthy amount of rebrandable materials to get you started.
White-label vs. third party application - which is better?
This all depends on the needs and goals of your agency. If your agency doesn’t feel comfortable putting your brand name on someone else’s software, or you really prefer a certain third party application because the features align well with your current offerings (or whatever the reason may be), then you may want to go through a third party. Maybe their price is right or they are offering you a great deal, be careful that the cost savings outweigh any possible cons. Make sure you do a thorough vetting process and ask as many questions as possible.
One thing to watch out for:
Some third-party applications and white-label partners may sell to your customers, local businesses. This would make your partner also your competitor. Find a supplier that has similar goals, one with as few competing interests as possible. That’s really important to us, and so Vendasta doesn’t sell to small and medium-sized businesses, we only work with agencies and media companies.
However, there are some white-label companies that also sell directly to SMBs. When analyzing which solution and route you want to go with a software offering, make sure you ask your prospective partner if they also sell to the businesses you will be targeting and what steps they take not to snipe any of their partners' current and prospective clients.
Should you resell white-label digital marketing software?
Do you have any issues with putting your brand on another company’s software? There is a risk in doing so, and it is important to do your due diligence to choose the right solutions provider to partner with. If there is a problem with the software, the customer will place the blame on you, because your logo is on it. That being said, choose a solid solution, one where that won’t happen. I suggest weighing the pros and cons of white labeling. Do the pros outweigh the cons? If so, then the next step should be a process of comparing white label software suppliers and vetting them out until you find the right match for your company. Use this guide to help you decipher between a good and bad partner.
White label marketing services
If you are wondering if white label digital agency services are the right move for you, this section is for you.
4 benefits of white label digital agency services
1.) You can add more service offerings to your agency, quickly and easily
Many agencies start out in the biz doing one thing, maybe reviews or social marketing. Then you land some bigger clients but they leave because they also want listings and SEO. You want to become more of a full-service agency to keep your clients and offer your clients more value, aside from continually attracting more business. Well, the more you can do, the more you can bundle and provide value for your clients. You can be their one-stop-shop and reduce some of that vendor clutter they have been facing.
2.) White-labeling digital agency services are completely scale-able
When you white-label digital agency services, you just bill the client. There is an on-boarding process and getting the agency running to your standards and preferences, but when your clients have issues, the white-label digital agents are running the support for you and the heavy lifting.
3.) It frees up your time to focus on your core competencies
Such as selling more and building your book of business. If some digital agency services aren’t your wheelhouse, then you need to become an expert in SEO and train your current agents on SEO. SEO (and other digital marketing specialties) are areas of expertise where it takes a lot of time and knowledge to get good at, and many clients want to see hard proof such as domain authority to know you have experience with SEO services.
4.) You get a dedicated team of knowledgeable and trained agents focused on your business
You don’t have to deal with the overhead of additional resources such as taxes, insurance or other overhead. You don’t have to deal with turnover of digital agents, the cost to acquire and retain digital agents. And maybe most importantly, you don’t have to deal with HR issues, hiring, training and professional development on employees outside your realm of specialty.
White-label digital agency vs. in-house - which is better?
Again, this all depends on the needs and goals of your agency. If your agency doesn’t feel comfortable putting your brand name on someone else’s digital agency services, or you really prefer a certain third party service because they pair well with your values or they have an unparalleled expertise in a specific segment of digital marketing (or whatever the reason may be), then you may want to go through a third party.
Maybe their price is right or they are offering you a great deal, be careful that the cost savings outweigh and any possible cons. As they say, you get what you pay for, so make sure you don’t pay for what you get. Make sure you do a thorough vetting process and ask as many questions as possible to make sure they have a stellar on-boarding process and are really good at handling your clients—as good, if not better, than your agency does.
One thing to watch out for:
Again, some third party agencies and white-label agencies sell to small and medium businesses directly, so become your competitor with access to your client list. Find an agency partner that has similar goals, one with as few competing interests as possible. When analyzing which solution and route you want to go with adding or expanding your digital agency offering, make sure you ask your prospective partner if they also sell to the businesses you will be targeting and what steps they take not to snipe any of their partners' current and prospective clients.
If you are debating using a white-label agency or freelancers, or having an in-house agency, I recommend writing all of the pros and cons of each and comparing those with the goals of your business. What is going to help you achieve your goals? What aligns with the vision of your company?
Should you resell white-label marketing services?
Similar to the conversation above in regards to white-label digital marketing software: Do you have any issues with putting your brand on another company’s digital agency services? There is a risk in doing so, and it is important to do your due diligence to choose the right white-label agency to partner with. If there is a problem with customer service, or any errors are made, the customer will place the blame on you because your name is on the line.
That being said, choose a solid agency, one where that won’t happen. I suggest weighing the pros and cons of white-labeling. Do the pros outweigh the cons? If so, then the next step should be a process of comparing white-label digital agencies. Do they offer all of the services you were wanting to add? Vet them out until you find the right match for your company.
Now, if you want to look at adding both software and services, and if you want a good mix of both worlds, you may want to consider some type of white-label marketplace to make managing white-label products, packages, and more in an easy to use, all in one place.
A marketplace provides the software, services and a place to sell everything. Customers can help themselves by adding products and packages, or even researching a bit more about products.
What to look for in a white-label partner
They have similar goals and vision, it’s a good fit
Find a white-label partner that has a vision or goals that align with your business. Remember, this is going to be your strategic business partner and you want to make sure this is a good fit for both sides. Unless they can create strict policies and assurances they won’t try to sell to your customers, I would steer clear of a partner that sells directly to SMBs.
They provide a solid product or service that is right for your business
Look for a partner that has a solid solution, whether it is a software or a service. If it is software, do they continuously improve their product? Are they willing to make improvements based on your suggestions? Is it user-friendly?
They have a solid reputation and track record
Are they honest, transparent and upfront? Do they have a good reputation in the industry? We know all about reviews in our industry, so do your homework on the business. How long have they been around? Are they considered an expert in the industry?
They have experience being a white-label partner
If you are white-labeling their product or service, make sure they have experience and knowledge in being a good partner. White-labeling software and services is more involved than just adding a logo to an existing product, it requires unique processes that are strategic and well thought out.
They offer stellar service and support
Is there a clear and organized method for on-boarding and training your business so you can start selling soon? Is there a detailed and thorough training process for the process and using the software/service? Do they have adequate resources to help you continually learn and grow? How fast they have been responding to you thus far is a good indication of how organized and fast the company is.
They offer proof of performance through reporting
What kind of reporting, or analytics do they offer so that you can provide proof of performance to your customers? You need to be able to show that the product and service is worth it and is helping the business. Otherwise, your clients will have little reason to stick around.
Their contract terms are clear
Do they have a detailed contract process and are they clear about the terms and conditions? If they are transparent and open, you will be able to tell now if you haven’t been able to tell before. They should be clear on their minimum lock-in period. Don’t be afraid to ask questions before signing on the dotted line.
You can test drive the product or service
How will you know if a service or software will for your business if you can’t try it before you buy it? You should be able to take a look at the software or play the part of a potential customer with their digital agents to learn how their services model flows and can work for your business.
What to watch out for in a white-label partner
They also sell to SMBs
If they do, make sure there is a way that they can ensure that they won’t poach your clients or that you won’t be in competition with them for prospective clients. If they can offer a lower price and you are selling the same product, you know that the SMB is probably going to choose the more cost-effective option.
Their products/services are too cheap to be true
If so, they probably are. You are looking to add a product or service that adds benefit to your clients. Make sure you do your homework and act in the best interests for your agency and customer. Don’t let your clients down like that!
They are bad and/or inconsistent with communication
Bad communication between you and the white-label service provider can lead to problems that will build up and end in broken client relationships. Remember, with a white-label product or service, your brand name is on the line. Make sure you put your brand name on a product or service that you are proud to offer your customers—as proud as you are to offer your own in-house products and services.
There is little brand consistency
This is another point that lines up with communication. Make sure your product/service provider knows your brand and how to represent you. If you are just another number to your partner, expect them to treat your customers the same. If you have specific standards or procedures for how you treat your customers, don’t settle for any less. You want the white-label software or services to be an extension of your brand and the level of quality that you bring to the table.
One last word of advice:
Don’t drown in the white-label
White-labeling doesn’t mean that you should lose your brand’s identity. Make sure you are still making a name for your agency! Have a defined brand and core that stems from your company vision and goals. Offer something unique of your own, to differentiate and stand out from the digital marketing crowd. As you know, the space is becoming more fragmented.
Other agencies will be working with these suppliers as well. As convenient as it is to use their white-label materials, try to mix it up where you can and add a few pieces of original content where possible. If your partner provides a one page sheet or a blog, but you know that you can provide more knowledge because it is your specialty (ex. review management for lawyers), don’t be afraid to produce some original content to show prospective clients you are the king of your niche or your area of expertise.
Just because you are white-labeling your digital agency product or services, doesn’t mean you should stop practicing the art of marketing your business. Businesses are constantly marketed and pitched to, how can you offer them something that they need, that no one can fulfill as well as you can? I know it is hard to fit it in when you are busy trying to get more business, but the investment can pay off greatly for your company if done correctly.
How to get started with white-label
Want to know how to successfully implement a white-label product or service? Get our guide with 18 detailed tips to make sure you make the most out of your prospective business relationship.
If you want to explore white-label solutions to sell to grow your business, check out the Vendasta Marketplace.