What is White Labeling vs Private Labeling?

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Q&A Pro › Category: eCommerce › What is White Labeling vs Private Labeling?
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Ulrike Glopp asked 5 years ago
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Dani Avitz Staff answered 5 years ago
A private label product is produced by a manufacturer according to specifications sent by a Seller. Once the product is manufactured, it is then rebranded, marketed and sold exclusively by the Seller. A white label product is a product that is produced by a manufacturer is not bound to specifications by one Seller, but rather a generic product to be sold to, and by, multiple Sellers. Once the product is manufactured, it is then rebranded, marketed and sold exclusively by the Sellers. 
Similarities between Private Label and White Label products:
  • Sellers are not involved in manufacturing the products
  • Sellers have exclusive control over rebranding, marketing and advertising the products
  • Manufacturers do not have trademarks to the products
Differences between Private Label and White Label products:
  • Product customization: Private Label Products are manufactured according to specifications sent by the Seller to the manufacturer while white Label retailers are already made by the manufacturer before a deal with a Seller is accomplished. The only customization option that’s left for White Label retailers is packaging. 
  • Exclusivity: Private Label products tend to be perceived as more exclusive by shoppers since they’re produced according to the particular Seller’s specifications and therefore unlikely to be sold in the same form by another Seller (Note: The manufacturer may sell a variation of this product to another retailer). On the other hand, White Label products being generically produced and sold to multiple Sellers lack exclusivity. 
  • Cost and ROI: Private Label products require more investment of time and money into product research, product development and marketing, however, PLP will most likely yield a higher ROI representing a unique product in the market which customers tend to appreciate. On the other hand, although White Label products are sold to the Seller for a relatively cheaper price, the investments of time and money into marketing are substantially higher. If done right, both PL products and WL products can bring in good money.