Everything You Need to Know About White Labeling

White labeling is becoming more and more common. Most retailers are familiar with the concept, even if they’re not totally clear on the benefits. Interestingly, white labeling is expanding quicker than national brands. The white label market share makes up nearly 25% of sales in the US.

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.

A white label product is one that’s manufactured by a third-party manufacturer. It is then sold under a retailer’s brand name. The retailer specifies every detail of the product: packaging, labeling, and what goes in the product itself. There is a lot of flexibility with white labeling. Most importantly, there is a lot of potential.

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.

Loyalty:
When you are the sole provider of your brand, it makes customers feel like they are among an elite few. This creates a sense of exclusivity and loyalty to a familiar, beloved 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.

is a great resource where you can meet up with potential partners. Networking events also help you check out the competition, improve your brand, and make critical contacts.

Conclusion

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.

White labeling allows you to offer your customers something unique and exclusive. You are also essentially cutting out the middleman, which enables you to provide your product at an affordable price and increase your profits. From distribution to marketing to sales, white labeling gives you more control over your business. Best of all, it lets you grow while your partner does most of the heavy lifting.