- Do you want to start your own brand?
- Are you considering sourcing products from China?
- Do you want to source with less upfront investment?
- White labeling may be the best option if you answered yes to more than one of these questions.
There are a lot of companies sprung up in China whose whole business is to develop and produce products without a brand, so it’s no surprise that in 2020, the market share of white label products accounted for around 20% in the US.
Read on to learn more about white label products, how they work, and the pros of utilizing while labeling for expanding your business.
What Is White Labeling?
White label, or white labeling, is a process that manufacturing suppliers who build the unbranded products or services, then sell them to their customers. The companies then rebrand and repackage the products or services with their trademarks and logos. Finally, the products or services are sold to the end-users.
How White Labeling Works?
Typically, a white-label product is a generic product (or service) that can be used by multiple retailers. Each retailer can package and sell the products or services by customizing their branding.
The key to white-label is anonymity, as end consumers who buy the final product do not realize that it was originally produced by a white-label provider.
White Label vs. Outsourcing Manufacturing
Outsourced manufacturing is a process that you pay for a manufacturing supplier outside of your company to build and customize a product according to your requirements. This way, you own the copyrights of the products enabling you to modify their functions or sizes.
A white label product is an existing product you buy directly from the suppliers while a product from outsourcing manufacturing is more like a concept that needed to be created with time and investment.
For example, if you are in the fashion industry, you can buy a certain style of T-shirt and print your logo on it, which is called white labeling. If you want to make a different style t-shirt or collaboration, you may need to reach a production supplier to get the T-shirts customized, which is outsourcing manufacturing.
What’s the process for White Labeling?
After sourcing the ready-made products or services from third-party suppliers, you have the right to rebrand, reprice and resell them.
Rebrand
You can add your touch through branding to the existing product. Rebrand the white label products and stand out from your competitors with your unique logo or package design.
Reprice
Pricing a product is one of the most important aspects of your business. Generally, you may establish any price you feel is fair for your products or services. Though the price of white label products is usually lower, you can find the most profitable balance for your business.
Resell
Launch your final products on your physical store, a website, or an E-commerce shopping channel and then you can sell them out. Besides, you can consider setting up a wholesale channel to sell your branded products to other retailers.
Why Do You Need White Labeling?
- Lack Of Expertise and Experience
The barriers to starting a business diminish with every technological advancement. But if you do not have relevant expertise, it would be risky for you to start your business.
However, white labeling can fix this problem in case you have such a headache. You don’t need to have any manufacturing experience to sell white label products. White label suppliers are always updating and improving products or services, so just keep up with the most updated suppliers and let them make the products for you.
- Lack Of Related Licenses
Making your unique products from scratch can be highly rewarding. However, those who just have great ideas can not enjoy this aspect of running a business, especially when you do not have enough qualifications.
For example, if you want to sell food, you need to have related licenses or FDA approvals. The complexity and cost of obtaining the licenses are the main reasons for some business owners to turn to white labeling.
- Less Upfront Investment
Selling white-label products or services is the easiest option for most small business owners who want to make a quick entry into the new market. With minimum investment and a lower entry barrier, the startup owners can focus on marketing to increase the brand influence.
- Amazon Sellers
If just become an Amazon seller, white labeling can be your priority to start the business. The rapidly increasing amount of published information from different social channels offers tons of opportunities for you to realize your dreams. Something goes viral on TikTok, you can immediately see a hit on Amazon.
The Benefits Of White Labelling
White Labeling is a simple, yet powerful tool to grow your business, which is a good option for any size of business.
For small and medium-sized businesses
- Generate Income
Compared with other business opportunities, you can generate steady income without a sizable investment through white labeling. You still can be creative. This is a good option for housewives and freelancers.
- Mitigate Financial Risks
You can take advantage of using the white label to make a profit without setting your production line and hiring too many employees in the early stage of your business. Even you are in the most saturated category, you may not lose too much like a new player.
- Make A Quick Entry To Market
White labeling allows you to start today. Without long-term development and testing, you can enter the market as soon as possible. Additionally, you can expand your product and service line easily without producing your goods from scratch.
For well-established businesses
- Save On Facilities
Even giant companies, they would choose to outsource some products from white-label suppliers, which can help to save on the cost of equipment, the workforce needed to operate that machinery, and the space it takes up on the company floor.
- Be More Specialized
A big brand is always trying to be more innovative in terms of the product itself. With white labeling, it’s more efficient for giant companies to focus on the new product development and core product lines, empowering them to be more specialized in their fields.
How To Plan On Your White Label Sourcing?
It’s important to select a product category where there’s room for growth. When you have a great idea to start your real business, you also need to consider more than just an idea.
If you’re considering sourcing from China with the white label route to expand your business, make sure you have your brand and product fleshed out.
Also, make sure that your brand design and packaging are finalized which can surpass your competitors. You can always submit your customizations with your white label suppliers.
Partner with China 2 West
Now that you have a better understanding of the private label products and their advantages, are you ready to get in on the action?
With 16 years of experience and a vast network of white-label suppliers, China2West offers a one-stop white label manufacturing consultant service. Additionally, we expand our manufacturing and assembly facility to keep up with the growing demand for overseas companies.
If you need more help with your white labeling plan, reach out to us to know more.
