When it comes to sourcing products for your retail business, you may be wondering what the difference is between white label, private label, and wholesale products. In this article, we will be discussing the pros and cons of each option and helping you determine which one is the best fit for your business. With the right choice, you can have the perfect manufacturer for your products. Discover Wonnda as the best way to find the perfect manufacturer for your business.
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 customization in the production process, and the differentiation is completely in the hands of the marketing team of the final brand.
Pros of white label
- 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
- A big range of manufacturers is available at wonnda.com for you to choose from
- Easier and faster to get samples, as the manufacturers can send you one of the already existing samples for you to test
Cons of white label
- Less control over the production process, including fewer available customizations, means more people can sell almost the same product.
- The brand is completely responsible for branding, forcing you 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 or formula and production process, so selling a product produced in another country with less strict regulations might have implications for the retailing brand.
A private label corresponds to a manufacturer who creates customized products for third parties to sell under their brand. In other words, the manufacturer gives you the freedom to choose the formula, customization, or design of the product they manufacture for your brand. This personalized product will be sold exclusively by the retailer/re-seller who ordered the product. You get ease in production while being able to do small customizations in your packaging and formula.
Private label production is the best of both worlds. You can easily produce a “generic” product, with the option to make customizations and make your product unique. In other words, the machinery for the production is already set, making it easier and faster to produce and also giving lower minimum order quantities while allowing you to personalize some aspects of the product.
Pros of private label
- The best of both worlds: the cheap side of production while being allowed to make a few customizations in the formula, packaging, size, etc.
- The list of manufacturers available to produce your product is huge, and Wonnda can help you find the best one.
- Lower MOQs when compared to contract manufacturing, for example.
Cons of private label
- The production can take longer than a white label, as the process sometimes has to be customized for your product and the machinery has to be adapted.
- It can take longer to produce because of the customizations
- As the customizations are being made and the machinery in the factory is being adapted for your product, the back and fourth sampling process can be time-consuming and sometimes costly for the brand
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 or a small retailer to make the goods available for the final consumer.
Pros of wholesale
- There are 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 they 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 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
Cons of wholesale
- 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 product quantities are available at the warehouse since wholesalers will buy a limited quantity from the manufacturer and might not be able to buy it again.
Create your private label product line with Wonnda – the European platform for white label, private label, and contract manufacturing
Are you interested in producing your private label products in Europe 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 products, launching your 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 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 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 fill out the form!