White Labeling vs Private Labeling

Your BUSINESS MODEL and concept are crucial in e-commerce. Selecting the best business strategy saves you time and money.

Which is better white labeling vs. private labeling? That is a DIFFICULT QUESTION, especially if you are a newbie.

Don’t be anxious. Our business specialists created this article after extensive investigation. By the conclusion of this article, you should be able to select the best model for you.

You might have wasted a lot of money on the wrong business model. So use our white labeling vs. private labeling guide to make a SMARTER SELECTION.

What is White Labeling?

A producer offers his GENERIC ITEMS to different stores through white labeling. None of the retailers are distinctive. But you have control over the product’s packing and labeling. All stores sell the same product with the SAME QUALITIES. They have different packaging and brand identities.

So, what comes to mind after that?

WATER BOTTLES OR ESSENTIAL OILS are excellent examples. They are the same at every retailer. The only variable is Quality and packaging, which is likewise price dependent.

What is Private Labeling?

In Private labeling, every retailer gets a UNIQUE PRODUCT from the manufacturer. Every retailer is distinctive in some way. They may choose between customization and features, as well as packaging. EACH MERCHANT has a unique product with unique features, packaging, and brand identification. This is called private labeling.

So, what comes to mind after that?

BRANDED CLOTHING or ACCESSORIES is a good example. They are unique to each retailer, brand design, Quality, and packaging. Not all items will have a GENERIC DESIGN.

Private Label vs. White Label: Main Differences

Both white labeling and private labeling have profited. A business owner can grow in both but in DIFFERENT WAYS. Here are the main differences between White label vs. Private Label

• Customization/Modification 

In a private label product, you offer CUSTOMIZATION OR MODIFICATION. You have to target certain pain points in your product to give exclusivity to your product. So you can OFFER VALUE and can stand out from the crowd. 

IN WHITE LABELS, you are keener to generic product ideas without modification. In the white-label model, multiple retailers sell the same product. 

• Supplier or Manufacturer preferences

Private-label goods sellers prefer factory owners. Those third-party manufacturers are easy to  REQUEST CUSTOMIZATION. Also, they offer a better price as compared to suppliers. Good prices with customization are real competition. 

WHITE-LABEL BRANDS prefers suppliers with variety and huge inventory. It would help if you had a ready-to-ship inventory with variety for SMOOTH FLOW. You have to sell products at good prices. Pricing is real competition. 

• Uniqueness of Product

Private-label products SOLD EXCLUSIVELY under one retailer. Private label companies need UNIQUE PRODUCTS. Their primary focus is to stand out from the crowd, like the music industry. Uniqueness attracts customers, and it also reduces marketing efforts. 

White-label companies don’t need unique products. They focus on good profit margins and the target market. Competition is on pricing rather than features. For example, pet supplies and the beauty industry. 

• Business strategy

Private-label brands have BUSINESS STRATEGIES to improve their product from time to time. They have to focus on the customer’s relationship. Their business strategy is to build a LONG-LASTING ECOSYSTEM. That targets customers’ pain points or emotions.

White-label products need to fulfill customers’ current DEMANDS. They can offer some extra value, which impacts little on their PROFIT. White-label examples are water bottles. The white-label manufacturer serves basic needs. 

• Brand authority & Identity

Private-label products have LONG-TERM GROWTH PLANS. Sellers want to grow their brand name. They focus on brand authority to make it a popular brand. Private-label brands can expand with brand authority. 

White-label products have PROFITABILITY, but they need a brand identity. Generic products can make money but don’t have a solid brand identity. White-label product sellers compete with multiple retailers on the same features. Nothing makes them unique instead, price and Quality. 

Which Partners is Right for Your Brand?

Choosing the right third-party manufacturer is important in white and private labeling. Your manufacturing company is the backbone of your eCommerce business. So Here are things you should note while choosing partners for your brand. 

Partners for Private Label

In private labels, you are offering EXCLUSIVITY AND UNIQUENESS. It would help if you opted for private label manufacturers instead of suppliers. A private label manufacturer offers customization or modification to your product. 

Customization strengthens the CUSTOMER’S RELATIONSHIP. So it’s always better to go with factory owners instead of vendors. Vendors don’t offer customization. Private label manufacturers also offer good prices so you can compete with pricing. 

Packaging also plays an important role in private-label brands. Ask your partner whether they offer better packaging at a good price. Most of them do offer. 

Quality inspection is also important. Contact any inspection service. They will inspect the manufacturing process and give you a DETAILED REPORT. Inspection will help you to avoid conflicts with customers.

You find the best partners on Alibaba. Also, you contact any private sourcing agent for CUSTOMIZATION. Alibaba has many factory owners, so it’s also the best option for you.

Partners for White Label 

They sell generic consumer products. Many retailers sell the same product. Don’t have to work on the product idea. You have to provide BETTER QUALITY AT A BETTER PRICE. These will be the key differences in your PRODUCT MARKETING. 

You have to look for vendors or suppliers who offer better prices. These vendors order in bulk from factory owners. They can save more on production costs due to bulk orders. So you get better prices. 

You also offer GOOD PACKAGING on your product. So contact suppliers and also inspect the Quality. And start your white-label business. It is quick, like a private label product. 

The best partners for white labels are ALI BABA, DHgate, and Global sources. You could outsource Quality products with better prices from there.

Suggested reading: Cap Manufacturers

FAQs about White Labeling vs. Private Labeling

What’s Next

The MOST SIGNIFICANT ASPECTS of both models are sourcing strategy and product development. Pricing provides you with an advantage when it comes to white labeling. Furthermore, personalization provides you with an advantage in private labeling.

Sellers compete on price and distinctiveness. Your business will thrive with the best suppliers according to his model.

Want to get GOOD PRICING and CUSTOMIZATIONS direct from a third-party supplier?

Contact us! We get direct quotations from many factory owners and check Quality on your behalf.