Many people have heard the term “white label” but don’t fully understand what it means or how it works. A white label business is a type of partnership where one company creates a product or service, and then another company buys that product or service and sells it to their own customers under their own brand name.
Think of a grocery store that sells its own brand of peanut butter, but the peanut butter is made by a different company. The grocery store puts its own label on the product and customers associate that peanut butter with the grocery store’s brand.
Let’s continue reading for white label business ideas.
How Does a White Label Business Work
The white label provider handles the research and development, manufacturing, and production of the product or service, and often provides marketing and branding support as well. The rebranding company purchases the product or service from the white label provider at a wholesale price and then repackages it with its own branding and identity.
That company can then offer a quality product without the need for investing time, money, and resources into creating it themselves. They can focus on promoting and selling the product under their own brand name, while the white-label provider handles the behind-the-scenes work.
Why Start a White Label Business
One of the biggest advantages of starting a white label business is that it allows you to enter new markets quickly and easily. By leveraging the products and services of another company, you can broaden your offering without having to invest in expensive R&D or product development. This not only saves you money but also allows you to be more agile and responsive to changing customer needs.
14 White Label Business Ideas
By partnering with established companies and professionals, you can offer high-quality products and services under your own brand name. This allows you to focus on marketing and customer service, while the partner company handles the development and production. Here are white label business ideas that you might consider:
Reusable Tote Bags
They’re eco-friendly and can be customized with your own logo or design. Reusable bags are great for events, trade shows, or as promotional giveaways. There are many different materials and styles available, from canvas to cotton to recycled materials, making it easy to find the perfect option for your business under your own brand name.
One popular choice is phone cases, as they’re always in demand due to the popularity of smartphones. By white labeling phone cases, you can create your own designs and styles to offer to customers.
A white label apparel business involves sourcing or creating blank garments, such as t-shirts or hoodies, and printing or embroidering them with designs and logos chosen by the client. The business owner would act as the middleman, ordering the garments and arranging for printing, while the client would market and sell the finished products.
A white label drinkware business would involve sourcing or creating blank cups, glasses, or bottles, and applying logos or designs chosen by the client. The business owner would coordinate with manufacturers and printers to produce a finished product that can be sold to clients for distribution.
A white label cosmetics business typically involves sourcing pre-made formulas from a manufacturer and applying custom branding and packaging to the products. You would work with the manufacturer to ensure that the products meet your standards and would handle the marketing and sales of the finished cosmetics.
Hair products can also be challenging to produce but make for a profitable white label business model. With options ranging from shampoos, conditioners, and styling products, suppliers can provide customizable product formulations that cater to different hair types and styles. Entrepreneurs can create distinct product lines with a variety of fragrances or additional benefits such as UV protection or anti-dandruff formulations.
Supplements are another option for those interested in health and wellness. By white labeling supplements, you can create your own unique blends to sell to customers.
From candles and diffusers to picture frames and wall art, white labeling home decor products can encompass a wide range of items. By choosing your own designs and themes, you can create a cohesive line of products that appeal to a specific aesthetic or audience.
In addition to collars and toys, white labeling pet products can also include grooming supplies, beds, and even food. Catering to pet owners’ specific needs and preferences, you can offer a range of high-quality products that stand out in a crowded market.
Web Hosting Service
Web hosting white labeling services include everything from domain registration and website builders to email hosting and security features. Offering your own branded service, you can provide a seamless user experience and build customer loyalty. The business owner would handle client support and billing and the larger web hosting company would handle the technical aspects of server maintenance and management.
There are countless possibilities when it comes to white labeling a Software as a Service (SaaS) platform. Whether it’s for project management, marketing automation, or any other need for specific software, offering a branded solution can bring added value to businesses and organizations. The process involves licensing a software platform from a larger company and reselling it to clients under a private label. The business owner would be in charge of customer support and pricing while the larger company would take care of software development and maintenance.
Email Marketing Service
Email marketing services can also be white labeled, allowing you to provide email marketing services to clients under your own brand name.
If you have an eye for aesthetics and design, then white label graphic design is a great option. You can offer design services to clients under your own brand name and create logos, marketing materials, and other visuals that represent their brand. This type of business requires a strong understanding of design principles and software skills, but it can be incredibly rewarding to help businesses bring their brand to life.
When you run a business, you’re juggling many tasks at once, and creating compelling content may not be your strong suit. White label content creation involves developing written and visual content services for clients under your own brand name, rather than outsourcing to an outside agency. The idea is to provide a seamless customer experience, where the client interacts only with your business, even though the content work may be carried out by a team of writers, photographers, or videographers under your employ.
How to Start Your White Label Business in 9 Steps
Like any business, there are important steps to follow to ensure a successful launch. Here are the key steps for starting your company:
Develop a Business Plan
This plan should outline your company objectives, target market, marketing strategies, financing needs, and projected profits. A well-crafted business plan will act as a guiding light, helping you navigate challenges and identify opportunities along the way. It will help you stay on track toward achieving your goals and realizing your business’ full potential.
Choose Your Business Structure
For a white label business, there are four common business structures to consider: sole proprietorship, Limited Liability Company (LLC), partnership, and corporation. Weigh the advantages and disadvantages of each structure based on your business’s goals and nature before deciding which one is the best fit.
In the context of a white label business, a sole proprietorship is a suitable entity type for those who want to start small and have full control over their business. This type of business structure allows entrepreneurs to operate their businesses as a one-person show, with no partners or shareholders involved. The process of starting a sole proprietorship is relatively easy and involves minimal legal formalities.
As the owner and operator of a white label business under a sole proprietorship structure, you will have complete control over every aspect of the business, from branding and marketing to pricing and sales strategies. This level of control can be advantageous in terms of maintaining the quality of the product or service you offer, ensuring that your brand message is consistent, and maintaining your unique selling proposition.
Limited Liability Company (LLC)
For entrepreneurs who want the ease of setup of a sole proprietorship but seek protection from personal liability, a Limited Liability Company (LLC) may be the best structure for their business. Similar to a sole proprietorship, LLCs are simple to set up and require minimal paperwork. However, unlike a sole proprietorship, LLCs provide personal liability protection for the owner. This means that the owner’s personal assets are distinct from the business’s assets, and the owner is only responsible for the business’s debts up to the amount they have invested.
Another advantage of an LLC is its flexibility. LLCs can choose to be managed by their owners, known as member-managed, or they can hire an external manager, known as manager-managed.
In a white label partnership, two or more individuals come together to run the business, sharing control and resources while dividing profits and losses. This structure allows the business to operate under a brand name, but each partner is responsible for paying taxes on their portion of the income. Each partner is also responsible for the business debts. The downside is the actions of one partner can impact the entire business.
For a white label business structure, corporations offer extensive legal and financial protection to owners. This complex structure allows for limited liability protection, where shareholders are not responsible for the business’s debts or obligations. Corporations have a separate legal identity from shareholders, allowing them to enter contracts, sue, and be sued. However, there are regulatory requirements and formalities to follow, making them more costly to set up and maintain with added legal and accounting fees.
Choose the Best Supplier
Choosing the best supplier for your white label business is an essential step toward success. A reliable supplier plays a crucial role in ensuring the quality, consistency, and timely delivery of your products.
To choose the best supplier, you must consider several factors. First, assess their product quality and consistency by requesting samples and checking their track record. Second, evaluate their pricing, minimum order quantities, and lead time to ensure they meet your needs. Lastly, consider their communication and customer service to ensure smooth collaboration.
Get Funding if Necessary
You’ll need capital and your savings may not be enough. In this case, you need to explore funding options such as loans, grants, or investments. Start by preparing a business plan that outlines your vision, mission, objectives, target market, and financial projections. Then, research and identify suitable funding sources such as banks, crowdfunding platforms, or angel investors. Be prepared to pitch your business idea, showcase your feasibility, and demonstrate to the lender why your business is worth the investment.
Register Your Business
Registering your white label business is a legal requirement that prevents legal issues and ensures credibility. You need to choose a business name and structure, file the necessary paperwork and register with the appropriate authorities such as the Secretary of State or local county clerk. The process may vary depending on your location and business structure, such as LLC or corporation. It is beneficial to consult with a lawyer or tax professional to ensure compliance.
Obtain Licenses and Permits
White label businesses may require specific licenses and permits depending on their industry and locality. These may include business permits, zoning permits, tax permits, and industry-specific licenses such as food and drug administration licenses, alcohol licenses, or health permits. Research and identify the necessary permits for your business and comply with their application processes and regulations.
Open a Business Bank Account
Separating your business finances from personal finances makes it easier to track your income, expenses, profits, and taxes accurately. Open a business bank account that allows you to deposit and withdraw business funds and offers business financial services such as loans, merchant services, and overdraft protection. To open a business account, provide your business registration documents, tax identification number, business plan, and proof of address.
Get Business Insurance
Insurance is necessary for any business as it protects against unforeseen events that may lead to financial loss or damages. White label businesses should consider getting general liability insurance, product liability insurance, professional liability insurance, or business interruption insurance depending on their industry and risk factors. Research and compare different insurance providers and their coverage options and select one that meets your business needs and budget.
Market Your Business
Marketing creates awareness, attracts customers, and differentiates your white label business from competitors. Start by identifying your target market and developing a unique value proposition that showcases your product quality, benefits, and competitive advantage. Utilize various marketing channels such as social media, email marketing, SEO, word of mouth, and partnerships to reach your target audience effectively. Consistently analyze and refine your marketing strategies based on results and feedback to ensure continuous growth and success.
Partnering for Success
White labeling is a smart approach for aspiring entrepreneurs who want to start a business without going through the hassle of developing products and services from scratch. By collaborating with established companies and professionals, you can offer high-quality solutions under your own brand, saving on production, development, and maintenance costs. Whether you’re looking into graphic design, content creation, hair care, or software platforms, there are countless possibilities for white label businesses.
With doola, we can help you manage your finances and bookkeeping, so that you can focus on growing your business while staying organized and on track with expert guidance and support.
Is white labeling a profitable business strategy?
White labeling has the potential to be a profitable business strategy. Of course, there are plenty of other factors that impact a business’s ability to succeed.
What are the requirements for white labeling?
Requirements for white labeling vary depending on the product or service you are looking to offer. Generally, you will need to find a reliable and high-quality supplier or partner who can provide you with the necessary products or services to meet your client’s needs.
What is an example of a white label company?
In the beauty industry, private label brands like Morphe Brushes and ColourPop offer white label options for their makeup products. In the food and beverage industry, companies like Starbucks and Whole Foods offer white label products for their store-brand products.
What are white label digital products?
White label digital products are software, applications, or other digital products that are developed by one company and branded and sold by another company under their own name. Some examples include website builders, social media management tools, and e-commerce platforms.
How much does white labeling cost?
The cost of white labeling varies drastically depending on the type of product or service and the level of customization required. Some white label products may have a one-time licensing fee or a monthly subscription fee, while others may require a percentage of sales as a royalty fee. The cost can also depend on the size and scale of the project, as well as the level of support and development provided by the parent company.