Everything You Need to Know About White Labeling
You might be familiar with the Kirkland brand, which lines the shelves of Costco. You’ll see it on everything from clothing items to food, and you’ll see it often—Kirkland makes up almost 25% of Costco’s sales. Kirkland is one example of a successful white label brand, but it’s certainly not the only one.
What Is White Labeling
White labeling is selling a product made by one business under the name or brand of another business. In other cases, white labeling can mean an ingredient or component produced by one company to benefit another company’s brand.
It’s worth noting that most white label products are sold at a lower cost. As with the Kirkland brand, white label products can be sold independently or to support other products.
How Does White Labeling Work
One common reason for white labeling is to sell a recent product with no prior experience. It’s an experience that works best for people who want to try new things with production, not those looking to launch and build a well-known business.
Advantages of White Labeling
White labeling is growing in popularity for a reason. There are quite a few remarkable benefits to white labeling:
Profit margin: Typically, white label brands have higher profit margins than resale products. This is because making your own products is usually less expensive than buying remade products.
Exclusivity: One of the biggest benefits of white labeling is standing out among your competitors. When you have the exclusive rights to sell a product, you are the customer’s sole source.
Wholesale income: You can think about becoming a wholesaler and offer limited access to other retailers. Not only does this increase your exposure, but it also generates more revenue for your brand.
Choosing the Right Manufacturer
Researching your target customer is essential. Once you become familiar with your customer’s purchasing patterns, you’re prepared to present a proposal to a white label brand. You may want to patent your idea before meeting with anyone to protect your products and ideas.
Should you expand with white labeled products? White labeling allows you to decrease competition and increase your profits. Though white labels are often referred to as “generic,” the reality is that these products compete with brand name products and usually do very well. White labeling generates positive ROI (returns on investment) for manufacturers and store owners when done correctly.