White Label vs Private Label: What’s the Difference?

white label vs private label

Are you interested in starting or expanding your supplement business and want to find out how you can do that quickly? White labeling and private labeling are easy ways to get your product quickly into the market. These two distinct business strategies are an excellent way to get your product to market at breakneck speed.

But what’s the difference between them both? In this blog post, we’ll take a closer look at these two business practices and hopefully help you decide which one is better for you.

White Label Products: Overview and Characteristics

Characteristics of White Label Products

White labeling is using a ready-to-sell, existing product made by third-party manufacturers and reselling it with your own brand name and design. At the end of the process, it will appear as if the products have been produced by your company. These products are generic, which means the manufacturer will also sell them to other retailers as well, but they will look and seem different.

Your only chance of customizing the products is through branding and design packaging. That’s why you need to employ other ways to offer more value to your customers. This can be done by providing excellent customer service, creative marketing strategies, or using multiple sales channels to reach new markets.

Benefits of White Labeling

There are several benefits of using white-label products:

Cost-effectiveness – Buying a generic product is much cheaper than developing a new one from scratch. You’ll need little to no cost in research, and all you need is to create a design for your brand and packaging.

Ease of market entry – Because it’s a generic product, it’s ready to sell and you won’t need to worry about legal issues.

Market expansion – Ready-to-sell products mean you’ll be able to offer them to the market quickly, capturing any trends while they’re still hot.

Drawbacks of White Labeling

Although white labeling is an easy way to extend your product lines, it also comes with its drawbacks.

Limited control – You’ll have limited control over the product and have no chance of customization. You’ll have to take what the manufacturer gives you and won’t be able to enforce your requirements on product design.

High market competition – No customization means no unique selling point for the product itself. Generic products are bought and repackaged by numerous other companies, leading to market saturation and high competition.

Ideal Situations for White Labeling

Here are some scenarios that may make white labeling suitable for your business model.

  • If you are a retailer who’s looking for a quick entry into a market. You can easily take advantage of a new market trend without worrying about research and product development.
  • If you’re a startup that doesn’t have the capital to invest in R&D and manufacturing. Instead, you can let manufacturers do that for you so you can focus on other things customer service and marketing efforts.
  • If you want to expand your product line with minimal investment or test a new type of product with your customers without lengthy and costly research and development.

Private Label Products: Overview and Characteristics

Characteristics of Private Label Products

Private labeling means a supplement is produced by the third-party manufacturer and sold to another company that markets it as its own.

Unlike white labeling, you’ll be able to customize private-label products. It’s similar in that both use third-party manufacturers to produce the goods, but you’ll be able to control what goes into your products in private labeling. For example, you want to include a certain ingredient for additional health benefits to your supplements.

In private label products, you will work with the manufacturer to customize a product based on what you want. However, you might not be able to enter the market as quickly as white label products, as customization means you’ll need extra time to develop the product according to your needs.

Benefits of Private Labeling

Compared to white labeling, here are the benefits of choosing private labeling.

Control over product quality – You have total control over your product’s quality and formulation.

Brand exclusivity – Private labeling means you can customize the products and use them as a unique selling point. You’ll be the only one selling the product’s formulation, resulting in a unique product.

Higher profit margin – Because of the unique nature of your product, you’ll also be able to sell it for a higher price, which may result in a larger profit margin.

Drawbacks of Private Labeling

Despite its positive aspects, there are still drawbacks to choosing private labeling.

Higher production costs – With private labeling, you’ll need to work together with your manufacturer to create a product that’s suitable for your brand. This often incurs extra costs than buying something generic and ready to sell.

Dependence on manufacturer quality – Although you’re able to customize your product, private labeling still uses a third-party manufacturer. Your final product, efficiency, and overall quality will depend on your manufacturer’s capability.

Ideal Situations for Private Labeling

Here are some situations where private labeling might be a better fit for your business.

  • If you’re operating in a niche market or require a specific product that varies from generic ones.
  • If you want to build brand loyalty and market an exclusive product that only you have.
  • If you want to develop a premium product with a unique selling point.

Key Differences Between White Label and Private Label

Here are some key differences between white-label and private-label products.

Level of customization and control

Private labels offer more room for customization and control over your final product. On the other hand, white labels mean you’ll take the product “as is”, without having any control.

Market exclusivity and brand identity

Private labels provide market exclusivity and distinct brand identity due to customization. Generic or white-label products have no exclusivity and more competition.

Production control

As mentioned, private labels can give you more control over your products, including their manufacturing process.

Speed to market

White-label products are very simple to acquire and sell, making them much faster to market.

Investment costs

White labeling means buying something generic from a manufacturing company that produces it in bulk for multiple buyers. This may mean that you can buy the products at a lower price.

How to Choose Between White and Private Labeling

Now that you know each of the benefits and drawbacks of each option, it’s time to find out which one is best for you. Here are some factors you need to consider.

Budget – Determine how much capital are you willing to invest into your product. If you’re after something cheaper, then you should pick white labeling. If you have some capital to spare, you can go private.

Market speed – How quickly are you looking to enter the market? If you’re chasing a trend before it goes out, you can opt for white labeling for faster turnaround.

Brand identity – Are you looking to build a stronger brand identity? Then an exclusive product via private labeling might be your choice. If you already have a strong presence, you can capitalize on it and sell something generic.

Product uniqueness – If you want to create a unique product, private labeling is the better choice.

Final Thoughts

White labeling and private labeling have their own sets of benefits and drawbacks. Consider all factors provided to make an informed decision when you’re choosing between white and private-label products.

Come chat with us on how to expand or start your supplement business! At Natural Supplement Manufacturing, we provide high-quality, GMP-certified private-label and white-label solutions with a low minimum order quantity so you can enter the market with lower risk and a smaller upfront investment.

White Label vs. Private Label FAQs

What are the main differences between white-label and private-label products?

White labeling gets your products out to the market faster but there can be many other companies out there with the same product. Private labeling gives you more control over your final product and your product will be unique. However, private labeling tends to cost more in the beginning and your product will take longer to get out into the market.

What are the benefits of choosing white-label products?

White label will let you enter the market quicker which is useful if you are looking to meet the demands of a trending product. It also requires less investment from business owners at the start.

What are the benefits of choosing private-label products?

Private label products allow you more control and customization of your final product, which means you can tweak the products according to your requirements to create something unique for your own brand. In comparison, white labeling means that you and your competitors might be selling identical products.

Leave a Reply

Your email address will not be published. Required fields are marked *