What is white label?
White label is the process of creating generic and standardized products that will be sold to multiple re-sellers or retailers. This generic product can be branded and sold according to your brand. However, the freedom in customization is very limited and is a matter of slight changes such as logos, colors, packaging, or marketing material.
A white-label product is typically mass produced by a manufacturer and sold to retailers and other distributors for them to rebrand and sell to the final customers. This process does not allow any sort of customization in the production process, and the differentiation is completely in the hands of the marketing team of the final brand.
Benefits to white label
As it’s a more generic process, white label also comes with some benefits that might be ideal for your retail company. The benefits of the white labels include:
- The faster production process, when compared to private label, as the production line in the factory is already set and does not need to be customized
- The cheaper production process overall, since there are no customizations, and the manufacturer can produce bigger quantities at once and distribute over the many retailers and other members of the supply chain
- With the lower MOQs, as the production is already going and being sold to different retailers, you can buy a lower quantity to get started
- Big range of manufacturers is available at wonnda.com for you to choose from
- Easier and faster to get samples, as the manufacturers can just send you one of the already existing samples for you to test
Don’t know how to write a product request for a manufacturer? Click here to learn more and start your very own product line.
The not-so-good side of white label
In the same way that it comes with a bunch of benefits, there is also the bad side. A white label production will come with less control over the production process, including fewer customizations available, which means that more people can sell almost the exact same product. This makes the brand also completely responsible for branding, which can be both a pro and a con of white-label production. You have to use marketing to differentiate your product and make people buy it instead of the competitors, which might be difficult when coming from a small brand that is not so well established in the market.
The brands are also liable for any problems that customers might have with the product, even though they are not included and have no power over the production process. Sometimes, different countries have different regulations regarding the same materials and production process, so selling a product produced in another country with less strict regulations might come with implications for the retailing brand.
What is wholesale?
Wholesale is the category of the distribution process in which a big brand will intermediate the supply chain process by buying from multiple manufacturers and accumulating all the products in a big warehouse-like store to make it easier for retailers to buy smaller quantities to brand a sell for the final consumer. In general, it classifies as the sales of goods in bulk for either a big a small retailer, for them to make the goods available for the final consumer.
Benefits to wholesale
Wholesale makes the life of retailers a lot easier, especially for smaller brands, and has a lot of good sides, such as:
- There is no minimum order quantities, or they are extremely low, as the wholesale already bought the minimum quantities necessary from the manufacturer, anyone can go into the warehouse and buy as little or as much as you need. For example, if you’re producing flip-flops, the MOQ of the manufacturer might be 500 units, but in a retailer, you could buy only 5 to sell in your store and come back for more once they sell out.
- They facilitate the process for retailers since it does not involve negotiation, samples, orders, or deliveries. The retailer can simply go there, see the product and buy it with no stress.
- It’s usually closer to cities than manufacturers and allows retailers to come by with a car and leave with the goods, whereas the manufacturers might even be in another country, and all the communication must be done through phone or email, which brings more barriers into the equation
The not-so-good side of wholesale
As everything comes with a good side, wholesale also has its cons:
- It’s a bit more expensive than buying straight from the manufacturer, as the wholesale also needs to make a profit, they will sell the products for more than they bought from the manufacturer. The good side is that as wholesale is a big corporation, they can buy bigger quantities from the manufacturer at a discounted price and sell to the retailers at a still good price.
- Limited quantities of the product are available at the warehouse since wholesalers will buy a limited quantity from the manufacturer and might not be able to buy it again.
Which one is the best for you as a retailer
Both white label and wholesale are viable options for a retailer to see goods to sell to the final consumer, and each one of them has its pros and cons. The question here is: is it better for you as a brand to seek for products straight from the white label manufacturer or search for a wholesaler to intermediate the process?
The answer to that question depends on the brand itself and its intentions. If the brand is already established on the market, has powerful branding, and has a solid customer base, then buying straight from the white-label manufacturer might be a better idea since the price is usually cheaper than wholesale. If the brand is a bit smaller and does not have so many resources available to deal with the higher MOQs from manufacturers, then wholesale is a good option.
Create your own product line with Wonnda – the European platform for white label, private label, and contract manufacturing
Are you interested in leveraging these trending products but don’t know how to get your production up and running? Whether you’re an aspiring startup entrepreneur with an innovative product idea or an existing retailer looking to diversify your assortment with your own products, launching your own brand through a private label or contract manufacturing could be just the step you need to take your business to the next level.
Here at wonnda, we work with top European producers for private labeling and contract manufacturing. The first step in getting your supplement product to market is probably the most crucial – finding the right production partner for your project. The great advantage of wonnda.com is that you can simply let us do the heavy lifting. Just tell us quickly about your project or product idea. We will then approach the most suitable producers for your project and connect you with them. Sounds interesting? Then just fill out the form or send us an email with your desired product.