[This article was written by Ashley Kimler.]
If you’ve ever looked online for an inexpensive universal remote control or USB cable, you’ll notice hundreds of companies that sell the same products. These electronic goods have the same design specifications and generic color combinations. Their similarities aren’t coincidences. They’re usually products that retailers buy from manufacturers for the specific purpose of reselling the items under their brands.
These goods are easy to construct and are in high demand by global consumers. Manufacturers increase their profits by mass producing these items and selling them to hundreds of retailers across the world. The business world calls these commodities white label products. If you’re thinking about creating a new product line for your business, you’ll want to know when to consider using white label products and the times to go with custom manufacturing.
What are White Label Products?
White label products exist in various market segments from consumer electronics to personal care and cosmetics. Most people associate white label products with store-brand goods, but not all store brands qualify as white label products. Part of the appeal is that the products have already been tested and likely reviewed, so you can trust that you will get precisely what’s advertised.
Back to the explanation: many store-brand items are similar to white label products. A manufacturer produces a particular product for a retailer’s exclusive use, and the retailer sells the item under its brand name. The retailer has the option to upgrade or change the purchased product to suit the company’s target customers in various markets. An item like this is a “private label” product and not a true white label product.
Retailers invest in white label products with the expectation that the retail organizations will resell the goods to consumers without doing any value-added upgrades. How do consumers choose among hundreds of retailers that sell products with the same specifications? Most of them buy from white label product retailers based on marketing messages, special promotions, and incentives.
Benefits of Using White Label Products
Your company has a compelling backstory and a mission that resonates with your target audience. You’re ready to give them a product that answers one of their critical needs and presents your brand in a good light. If your proposed product doesn’t include cutting-edge technology, it’s likely that another business already sells your product.
That company may not engage well with your audience, and you believe that you can compete with it for market share. Using a white label product is one of the most effective ways that you can gain entrance into a market with a non-unique product. Here are the benefits that you’ll get from using a white label product.
- Fewer dollars spent on development and production
- Faster time to market
- Established quality assurance standards
White label products are useful for new, boutique companies that want to put their unique messaging on a useful product for a specific type of customer. Established companies also buy white label products to cost-effectively extend their offerings to existing customers and introduce their brands to foreign markets.
This is When You Should Consider Custom Manufacturing
While your company can save a ton of money by reselling white label products and not reinventing the wheel, there are times when custom manufacturing is the best solution. If you have an idea for a unique product, a white label product manufacturer won’t have the customer base in place to mass produce your product and sell it to hundreds of other retailers for adequate profit margins.
With an innovative product idea, your company will also want to protect its first-to-market position and not share the invention with a manufacturer that wants to sell identical products to hundreds of other retailers. You’ll want to engage manufacturers that will build your product to your exact specifications and sign agreements to protect your company’s proprietary formulas and intellectual property.
Your customers’ needs may drive your decision to use custom manufacturing and not white label products. Certain sensitive defense programs rely on domestic-made components due to national security concerns. In this case, your company’s choices of domestic white label product makers are limited. If you’ve built your company brand around offering custom solutions, you’ll want to skip white label products.
Personalized jewelry and footwear items that fit consumers’ specific dimensions are candidates for custom manufacturing.
Ways to Find Manufacturing Help for Your Business Idea
Advances in technology make rapid prototyping and product development faster than ever before. You can even leverage a graphene foundry service to develop and produce circuitry for innovative electronic devices or work with a company that does custom printing in glass. If your company’s new offering doesn’t need custom features, you’ll find many white label product manufacturers by doing some online research.
Looking for domestic white label product makers? Search ThomasNet, Alibaba, and IndiaMart for reputable companies by product category. For more advice, trust the experts to help you choose the right manufacturer.
Which will you pick: white label or custom manufacturing?
Ashley Kimler is the Content Director at Heroic Search, an SEO agency based in Tulsa.She’s been working in the digital marketing industry for over a decade. Follow @ashleykimler and @heroicsearch on Twitter to see what she and her team share next.