White Label Services

A: White label services, which are also commonly known as ‘private label refers to any product or service that is provided by the originating company with an agreement that another company can sell or provide it as if it were their own. The term ‘white label’ originated in the fashion industry where a company simply replaces the original clothing label with their own.

The word ‘service’ can mean both an actual service or the service of manufacturing a product, so physical, tangible products are also the result of this service.

The practice sounds like it should be illegal: passing off something as your own and keeping the identity of the original product or service provider a secret from your customer. But it is legal, and practiced far more often than the public knows. For example:

‘House brands’ like Kirkland at Costco or Kroeger at Ralphs Markets, are simply relabeled products from the originating manufacturer. The razor company ‘Dollar Shave Club’ has used white label very effectively, selling over a billion razors a year without ever producing a single one. Similarly, when you use an American service company, say a cable or phone provider, but the people who answer the customer service line sound like they are in India or Pakistan, it’s because they are - and as a rule, they are typically not direct employees of your original service provider.

Managed IT services providers can be on either side of such an agreement – such as providing ‘back end’ IT support or IT HelpDesk support to another IT consulting service. For ‘back end’ the name of the originating vendor need never be known, but for IT HelpDesk, all communications will be in the name of the company supplying the service directly to the end client.

This is a common practice, not only among the IT Support Los Angeles Community, but worldwide. If we at IT Support LA provide IT HelpDesk to “Generic IT Services Company”, we would answer those phone calls with, “Generic IT Services Company – how can I help you?”

With other types of service, the practice is more common with services that do not require the customer actually seeing a representative. Most often, white label services exist in fields such as Customer Service, Market Research, Sales Support, Email, and other styles of Marketing, Customer Benefits Programs, and others. You don’t usually see re-labeling with painters and plumbers.

A: Although similar in nature, the main difference is that with ‘private labeling’ the original manufacturer creates a unique product that is to be sold exclusively by the end-seller. The end-seller or retailer is granted the ability to make changes or modify the brand

With white labeling, a company manufacture an item in bulk, like generic pens, and then sell the same item to thousands of resellers under the reseller’s label. No retailers of the item can modify the product in any way – they can only relabel it.

For a company trying to create its own brand niche in retail sales, the private labeling system allows them much more creativity in molding the product to fit the branding image they desire. White labelers are simply hawking wares to the public. As popularity grows, some may switch to a private labeling agreement to enhance the unique aspects of their brand.

Ecomdash further explains the ramifications between both white and private labeling HERE.

A: It simply means that a company offers a service that they do not directly provide. The ‘White Label’ originally referred to the practice of buying products in bulk and putting one’s own label on them.

While on rare occasions this has been done illegally, as the practice developed, it became more advantageous to the end ‘white labeler’ to forge an agreement with the original manufacturer and purchase the products at a lower price.

This can also be done by the originating vendor or manufacturer by putting out the word that their product or service is available to be sold without their trademark under another name with a contractual agreement.

A: Decide what product or service you want to sell. Contact an original vendor and hammer out a deal. If you want to sell Teddy Bears, you only ‘bear’ the financial burden of sales, marketing and administration – depending on the original vendor, they may or may not handle printing and affixing your label and do the shipping themselves. It’s all in the deal you make. Many Chinese goods are available to be purchased in bulk, but it’s up to you to put labels on and ship to the end customer, which is a good thing. If your company address is in Los Angeles, you may not want your customers receiving the product from, say… Wuhan China.

A: For many businesses of all types, it’s an excellent idea – on both ends of the agreement. A manufacturer wants to make product – not market and sell it, so they either do so through official manufacturer’s representatives, or they may enter into while label arrangements.
 
A seller may know how to market, but not want to get involved in the capital investment and hassle of setting up a factory, with all the government regulations that go with it. There are perfect matches being made every day between the parties at both ends of this spectrum.

For services, the end-seller may lack the workforce to handle certain aspects, like product support or customer service, so rather than invest in that infrastructure, the seller simply hires out those services with the original provider’s employees identifying themselves as the seller’s employees.

A: This is the contract that details the transaction between Company A, who will market and sell the product or service under their name or label, and Company B, who originally manufactures the product or provides the service.