March 5, 2022
Are you also in some confusion related to the terms "white-label" and "private label"? Do you know what white label vs. private label is?
The major difference is who identifies what the product will contain. In a private label business, the buyer describes the ingredients, designs, parts, or offerings. While in a white label business, the manufacturer or supplier may offer different customizations to fit particular requirements, they specify the ingredients, design, parts, or offerings.
Well, let's dive into details to better understand both type of businesses!
In a private label business a product is manufactured by a third-party or contract manufacturer and sold under your business name. As a buyer, you tell everything about the product –from ingredients to how it’s packaged, what the label looks like.
Usually, you pay to have it manufactured and delivered to your store. Then, you sell the product directly to consumers or to other wholesalers.
You (Mrs. Michael) have a family recipe for cleansing cream. You contact a personal care products manufacturer that can mass-produce cleansing creams using your EXACT formula. The manufacturer makes and wraps your cream, specified by you as “Mrs. Jones cleansing cream”, and sells and ships Mrs. Jones cleansing cream to you.
Now, as a private label entrepreneur, you can either sell Mrs. Michael cleansing cream to Wholesalers who then sell it to retail markets. Or, you can sell online at www. mrsmichaelcleansingcream.com.
Product is your EXACT specification
You have control over product ingredients
Get complete Brand Recognition
You have control over packaging
You can’t run private label business without your own product recipe
Heavy Research and Development costs
Quite Expensive
In a white label business, products are manufactured by a third-party or contract manufacturer and marketed under your brand name. However, as the buyer, you ONLY need to specify what the label should look like. Here, the manufacturer has an expertise in manufacturing the product you want. They produce one product under different brand names, and thus, the manufacturer specifies what is in it and how it is packaged other than the brand name you specified, appearing on the label.
You (Mr. Ben) want serum that Looks like as if you made it. However, you don’t need a recipe to mass-produce serum bottles. You contract with a manufacturer who specializes in manufacturing effective serums. They take their recipe, make it, package it, and put your label Mr. Ben’s serum on it. They deliver Mr. Ben’s serums to you.
Now you can either: Sell Mr. Ben’s serums to Wholesalers who then offer it to retailers, or you market Mr. Ben’s serums at www.mrbenserum.com.
You don’t need any expertise
You don’t need to have a recipe or formula
It is often less expensive compared to Private Label
You get your brand recognition
You pick an existing product but don’t specify or control product formula
Both private label and white label have their advantages and disadvantages. A brand needs to go for the one that best suits its particular needs, budget, and other aspects.
