White Label vs Private Label: All You Need to Know
Private Label and White Label are the two common terms used in commerce. Whether you are in the clothing business or any other industry, you might have wondered which type of label is suitable for you.
We usually think about the labels before starting a business. It is necessary to decide on a suitable type of label for your business because it gives you a track to follow. You have to choose the right track that is according to your budget, expertise, and brand.
Private label vs white label is a long debate, and both have their distinct advantages and disadvantages. Therefore, beginners often get confused about which one to choose. If you are also struggling, you are not alone. Many other new entrepreneurs and businessmen would be thinking the same before making an investment.
In this article, we will dig deeper into the White Label vs Private Label. We will try to discuss every aspect in detail so that beginners can easily decide which one they should choose without any confusion.
Let’s start the discussion.
What is White Label?
White label products are generic products that are made by a third-party manufacturer and sold to multiple retailers or sellers. There is no branding, logo, label, or anything else on the product that can give a hint of the real manufacturer. After purchasing, the retailer is allowed to put its own branding, and most of the time, the manufacturer helps to put branding on the products. It looks like the product is made by the retailer or seller.
The above example is from the manufacturer’s perspective. Let’s have a look at another example from the perspective of the buyer.
A white label product is not according to the specifications of the buyer; it is a ready-made product for retailers. Thus, no change can be made to the product, except for branding and labeling.
In addition, products can be bought by anyone. For example, the jacket you bought can be bought by someone else, and the buyer can put his own branding. Thus, white label products are not exclusive; they are generic.
What is a Private Label?
A private label product is an exclusive product made by a third-party manufacturer for a retailer. The product is according to the requirement of the buyer, and the specifications and other details are provided for manufacturing. The buyer owns the product, and it cannot be sold to other retailers.
As the private label products are exclusive to one retailer, the retailer can sell them to customers or wholesalers. There is no other retailer on the market that can sell that product without your permission. Thus, there is a massive potential in private labeling as you are the only one to sell the product.
White Label vs Private Label—Detailed Comparison
Buyers, marketers, and entrepreneurs need to understand the difference between the white label and the private label. It is necessary to figure out the right labeling for the business. Here is a detailed white label vs private label comparison to clear doubts and confusion.
Investment is an important factor in starting a business, and it depends on the labeling you choose. White label products require less investment compared to private labeling. It is because when you go for a private label product, you need to pay a hefty amount for private trademarks.
In addition, you need to invest in product research and product development. You also pay more to the manufacturer because they are making exclusive products that are according to your requirements. The manufacturer needs to make changes in the manufacturing process, adopt new things according to the requirements, and make the final product that is only available to the buyer. These things increase the overall cost of bulk production.
In contrast, white-label products require less investment as the manufacturer produces the same product for all clients. For instance, if there is a special design on the clothing, it will be kept the same, and there is no need to change anything. Thus, manufacturers can offer white label products at a lower price. However, there is an investment needed for the advertisement and branding. But again, white label products are cheaper than private label products.
The exclusivity of the product lies in private labeling. The products are unique and cannot be found elsewhere as they are made specifically for one retailer. So all customers will have to buy the product from that retailer only. It helps in creating a unique business and keeping competitors away.
The product is unique in private labeling as it is according to the requirements of the buyer. For instance, the buyer gives the design, color schemes, and other details about the clothing, and then it is prepared. In addition, there is a sampling stage to meet the demands of the seller. Thus, the final product is entirely unique.
In white labeling, the same product is sold to multiple retailers. The manufacturers cannot change the product or consider the requirements of the buyers. With that being said, if the buyer likes it, he can buy it as it is, without any changes. Therefore, there is no exclusivity in white labeling. Your competitors can also buy the same product from the same manufacturer, and you cannot do anything.
Since exclusivity is killed in white-label, there is no way you can build a unique brand. Although the product has your branding, the same product will be available from a different retailer with different branding.
For private labeling, you need expertise or expert people that can help you get the right product. For instance, if you are ordering private label clothing from a manufacturer, you need to provide the tech pack and other details.
The tech pack includes the design, bill of materials, color sheet, sizing, and everything else needed to make the garment. Thus, it should be perfect for getting the desired results and mitigating the delays in production. With that being said, you need an expert who will create a tech pack according to your requirements and provide information about the final product.
In the private label, you need to tell the manufacturer what you want. Therefore, you should have enough knowledge and expertise to deal with it.
On the other hand, white labeling is pretty easy. The manufacturer knows everything about the products and makes them on its own. You only need to select the garment you like and order the quantity you need. There is no need for a tech pack and other details.
Moreover, for private labeling, you need to create your brand identity, and it takes a lot of time. But in the white label, it is easier to enter the market, but it is quite difficult to compete with other retailers as the products can be the same.
There is no concept of product customization in white labeling. The manufacturer provides the details of the product, and if the buyer is satisfied, he can buy the product as it is. The same product is sold to all buyers without any changes and customization. However, branding and customized packaging can be done, and some manufacturers also offer slight modifications according to the customer.
In private labeling, the product is entirely unique. It is according to the buyer’s requirement, so the buyer can ask for any changes. The sample is made according to the given details and sent to the buyer. If the buyer needs more changes, he can ask for that, and that will be considered in the next sample or bulk production. There is complete freedom of product customization in the private label.
White label and private label products have no manufacturer’s trademark. It is a common feature that both types of labels possess. In both labels, third-party manufacturers make the product, but they do not have any kind of branding that can give a hint of the manufacturer. Usually, it is difficult for the buyer to know whether the product is made by the brand or a third-party manufacturer.
ROI is the most important aspect that should be considered while starting a business. Both private label and white label are beneficial, but it depends on how you do it.
The private label requires massive investment as the product is unique. Therefore, it has the potential to bring a massive return on your investment. Once your brand is established, it can generate outstanding ROI that is rare in white label. But again, you need to spend a lot at the start to make your business profitable.
The white label usually requires less investment than the private label, but it can also bring excellent ROI. However, the ROI depends on your marketing and how you deal with the competitors.
What to Choose? Private Label or White Label
Both private label and white label have their own exclusive benefits, pros & cons, and potential. Therefore, you need to decide what is better for your business.
If you are looking for a long-term brand with excellent ROI, the private label should be the first option. But keep in mind that for the private label, you need more investment than the white label. Moreover, if you want to bring a unique product to the market, the private label is the only option. You can customize the product according to your requirements.
In addition, for starting a private label business, you should have some experience. Otherwise, you might end up wasting your money. It is more difficult and requires a lot of expertise.
White labeling is suitable for beginners having a normal budget. It does not require any expertise related to the product because everything is done by the manufacturer. Moreover, it is quite easy to get into the market through white label products and start generating profit through a correct business strategy and marketing.
But keep in mind that you need to compete with other retailers that are also selling the same product. Moreover, you cannot customize the product according to your requirements.
White label vs private label is undoubtedly a long debate, but we have tried to summarize everything for the ease of our readers. Anyone can be selected after considering the budget, expertise, need for customization/exclusivity, and other factors we have discussed. You need to decide which one is suitable for your business.
At MMS Clothing, we offer private label as well as white label garments. If you are choosing a private label, we have professional designers for the garment, so you don’t need any expertise. Moreover, there is no MOQ, so you can order one piece per style per color. We also have a white-label or wholesale eCommerce store, The Brands Online, where customers can buy any product without any hassle.