The world’s most iconic brands sometimes sell items that are more alike than you might think. Some branded products are white label, meaning an outside company manufactures generic goods that multiple brands can sell under their own names.
White labeling is common among many categories of consumer products and services. Learn about which industries use white labeling and the benefits and drawbacks of white labeling to determine if it’s right for your business.
What is white labeling?
White labeling is when one company produces a product or service that other businesses then sell under their own brands. This process lets retailers sell branded products without investing in product development.
White labeling can also provide manufacturers with an additional revenue stream. For example, Tique Chandler, founder of Canadian raw honey brand Chandler Honey, uses the steady income from selling white label honey to focus on developing her own brand.
“I’ve got all of these strengths that allow me to work with people who want their own honey brands [but do] not have honey,” Tique says on Shopify Masters. “That’s a great recurring customer. [They] help me pay my bills so that I cannot worry about rent, and I can just work [and] worry about growing my own business.”
For retailers, selling white label products might be a good option if you want to sell a trending product, start a business or new product line quickly, add a branded product line to your retail store, or capitalize on a prominent market position.
Industries that use white labeling
Because of the nature of white labeling, it makes sense for industries where there’s both a high barrier to manufacturing your own products and something to be gained by adding unique branding to generic products.
Here are a few categories with popular white label products:
Food and beverage
Step into your local big box retailer and you’re bound to find a number of white label grocery items. Costco, for example, is famous for its high-quality yet affordable white label products sold under the name Kirkland Signature.
White labeling isn’t just for major chains. Small businesses use white labeling all the time; a common use case is coffee.
Roasting beans is a major undertaking, so many cafés, hotels, and other small businesses sell branded coffee from a white label coffee producer like Roastify.
Roastify sells both white label and private label products, in addition to coffee dropshipping options that make it accessible for businesses to sell coffee online. White label customers choose from different coffee blends and customize their product packaging design with their logo, colors, and messaging.
Fashion and apparel
White labeling lets brands try new styles, prints, and colorways without manufacturing the clothing themselves. The manufacturers design the clothing and source fabric, then add tags with the seller’s logo.
UK-based fashion brand Whispering Smith sells wholesale clothing as well as “garment re-processing,” which involves adding branded elements (like care labels, swing tags, barcodes, and even branded buttons and zippers) to existing pieces.
Skincare and beauty
Skincare is another sector where white labeling is prevalent. A single manufacturer might produce moisturizers, serums, and other products, while various skincare companies package and brand them differently.
Depending on their relationship with a supplier, some white label skincare companies may make minor adjustments to an existing formula, such as adding specific ingredients or changing the scent.
For example, NourishUs Naturals is a white label skincare company with various product categories, such as balms, cleansers, and exfoliators. Some of their products come in bulk and can be lightly customized, while others are prepackaged and ready to label.
Some cosmetics brands also use white label manufacturers for their makeup products, allowing them to offer a wide range of colors and formulations. This strategy also reduces investments in extensive product research, development, manufacturing, or cosmetic fulfillment facilities.
Software
The tech industry also uses white labeling for software. Companies add their branding to a software application that third-party programmers make.
This is particularly common in the software-as-a-service (SaaS) industry, with core features developed by a single company, then repackaged and sold by various other companies that may add additional features or services.
Mailmunch is a white label marketing solution that provides hundreds of templates and lets businesses pick features like contact management, lead capture, and email marketing automation.
White label benefits
White label branding has benefits for manufacturers and sellers. Each can focus on their area of specialization (production for manufacturers and marketing and branding for sellers) and leverage the other’s expertise.
Some of the main advantages of the white label model include:
- Low barrier to entry: Sellers can enter new markets without knowing the intricacies of producing a regulated or niche product. That means skipping steep production costs and more quickly setting up an online store or selling on social media.
- Core competency focus: Manufacturers can focus on production while sellers handle marketing, branding, and customer acquisition. Plus, you don’t need to open more brick-and-mortar stores.
- Lower cost per unit: A white label manufacturer can bring down per-unit costs with large production runs, selling in batches to many retailers.
- Consistent quality control: Experienced white label manufacturers may already have established quality assurance processes in place, leading to more consistent product quality across different brands.
- Market adaptability: White labeling allows brands to quickly respond to consumer trends and changing economic conditions.
White label drawbacks
With other brands selling the same product, white labeling comes with competition. Here are a few other drawbacks:
- Limited product differentiation:When multiple brands sell the same underlying product, differentiation may come primarily from factors like branding, packaging, and price.
- Copycatting: White label sellers must carefully navigate the fine line between creating appealing packaging and “copycatting,” or using designs too similar to established brands, which can lead to intellectual property disputes.
- Low customization: White label sellers work within the constraints set by white label suppliers, which often limits their ability to fully customize products. For more extensive customization, retailers commission private label products or use print-on-demand services.
White label vs. private label vs. print on demand
There are a number of business models that allow retailers to bring a custom or semi-custom product to market. White label and private label describe different approaches to sourcing and branding products, while print on demand (POD) is a popular production and fulfillment model. Here are some of the key differences:
| White label | Private label | Print on demand | |
| Product customization and uniqueness | Multiple businesses can sell the same product under different brand names. | A product or variation is developed or customized for a specific business. | A unique design or logo is printed on a generic item, like a T-shirt. |
| Production speed | Typically fast, because the manufacturer or seller is simply adding a new label to an existing product. | Typically slower, since the product may require additional development or customization. | Fast, because the printer is adding a design to an existing product. |
| Upfront costs | Sellers usually purchase white label products upfront. | Sellers may need to purchase inventory upfront and meet minimum order quantities (MOQ). | Typically low upfront inventory costs because products are produced after customers place orders. |
| Shipping and warehousing | Shipping and warehousing depend on the supplier; some manufacturers also offer fulfillment services. | Sellers handle shipping and warehousing. | POD companies handle shipping and warehousing, similar to dropshipping. |
| Product types | Any type of product, especially food and beauty, but also software and services. | Any type of product, especially consumer packaged goods (CPG). | POD products can easily be printed on, such as apparel and home décor. |
