White-Label Partnerships: Overview + Pros & Cons

Businesses looking to outpace their rivals often turn to white-label partnerships. Let’s find out why.

Businesses looking to outpace their rivals often turn to white-label partnerships. These unique setups allow them to expand their portfolios and delight customers without increasing internal costs or over-exerting their in-house teams.

With the support of a white label partner, companies can reach more clients, grow their sales, and improve their competitive rank. Yet, there’s more to this partnership than building your bottom line.

In this guide, we’ll cover what a white label partnership entails, including the pros and cons to know and what to look for in one.

What is a white-label partnership?

A white label partnership is a business setup that enables one company to resell the goods or services of another company. However, unlike an outsourcing or subcontracting agreement, a white label partner does not package those goods or services as their own. Instead, they become part of the purchasing company’s offerings and are marketed under their own brand name.

In turn, clients are not aware that such a partnership even exists. The services provided are consistent and cohesive, and the transition of work is seamless.

This is a common practice among marketing agencies, software-as-a-service (SaaS) providers, and startup companies. They will often team with a white label company to meet the needs of their growing market. For instance, landing page software can be sold as a white-label offering.

With a white label partner, those companies can receive additional support when and where they need it the most. They can then pass that support on to their clients.

While services are often exchanged in a white label partnership, the setup can apply to consumer goods, too. Companies that provide physical products to buyers might not have the bandwidth to produce all of their inventory in-house. In that case, a white label partner can take care of some of the manufacturing legwork. This allows the retailer to put their own brand and logo on the finished product.

Photo by Artem Podrez from Pexels

White label partnerships vs. private label

A white label partnership differs from a traditional reseller or private label relationship. With a reseller, the producing company retains its brand name, and the goods or products are sold as-is. For instance, a local bakery might offer Otis Spunkmeyer cookies and muffins, sold in the trademark red-and-white packaging. In a white label partnership, the bakery would pass the same baked goods off as their own culinary creations. Only instead they would use their unique brand name and designs.

With a private label, a line is developed and sold exclusively to one retailer only. Examples include the Kirkland brand at Costco or Equate at Wal-Mart.

Dropshipping is another common form of private label marketing. With this setup, a retailer purchases merchandise made just for them. They then rebrand it and sell it for a profit. All of the shipping needs are outsourced to a third party.

While a white label agency can offer unparalleled benefits, it isn’t without its risks. Before entering into such a relationship, it’s important for savvy business owners to carefully weigh the pros and cons.

Examples of white-label partnerships

Chances are, you encounter white label products and services on a regular basis. From the toiletries you purchase to the software you use, many of your go-to products were likely produced by an invisible third party.

Let’s take a look at a few of the most common industries that employ this practice, and how it works.

1) Consumer goods

In the consumer goods sector, a manufacturer will mass-produce a number of generic white label products, and then resell those products to various retailers, who will rebrand them as their own. This allows the provider to access a wider distribution network, expanding their total number of sales.

At the same time, it allows the retailer to access an array of finished goods without having to create them from scratch. Throughout the partnership, they’re able to retain wholesale control of their brand. While they can achieve similar effects with a private label marketing company, the customization options are often limited.

When a consumer eventually purchases a white label product, they are unaware that any of this teamwork took place. They believe that the brand and manufacturer are one and the same. In time, this creates product exclusivity, strengthens reputation management, and cultivates customer loyalty.

2) Digital marketing services

Digital marketing is a broad term that encompasses everything from PPC advertising and SEO services to social media networking.

A marketing agency that offers these services could spend a small fortune trying to train employees in every facet of the industry. Once they’ve hired the right people and completed the requisite onboarding tasks, there are also ongoing costs associated with training and retention. These expenses could be prohibitive, especially for small-to-medium businesses and startups.

To keep up with client demands, marketers will often turn to outsourcing. Or, they’ll hire a white label agency to take care of some of the work for them. Then, they’ll rebrand those services and products as their own.

In addition to PPC, digital marketing services and SEO services, this extends to other white label digital solutions, such as:

  • Web design and development
  • Web development
  • Project management tools
  • Content marketing
  • LinkedIn marketing and lead generation
  • Mobile app design
  • Social media management
Website design mockup — photo by Viktor Hanacek

3) Banking and finance

In the fintech industry, there are many legal and regulatory conditions that must be met before a company can launch a product. A white label service offers a valuable, time-saving workaround.

With these setups, third parties can leverage the existing capacities of an established financial institution to offer sleek, fully-branded services to their clients. For instance, a mobile banking app might offer checking and savings accounts, bill payment systems, or personal loan assistance, all supported by another bank’s license, compliance measures, and web design technology.

4) Software as a Service (SaaS)

White-label SaaS products usually include software and services, all branded by a particular vendor for use by different companies. The SaaS service provider will often lease out the rights to their software over a pre-specified subscription term.

Common examples include:

  • Social media management software
  • Marketing automation software
  • PPC campaign management software
  • Email marketing software
  • Web development software
  • SEO services

If a SaaS business wants to offer a particular product to end customers but is unable or unwilling to create it from scratch, then a white-label partnership makes it possible.

White-label partnership benefits

If you’re considering outsourcing work to a white-label service provider, then it’s important to know what you could stand to gain.

1) Time and money savings

One of the greatest benefits is that of time. By outsourcing major aspects of project management to a white label service provider, you can expedite your go-to-market (GTM) strategy and launch new services and products much more quickly. The only work required on your end is to add your own brand components, which should already be well-established and ready to go.

At the same time, you’ll conserve valuable internal resources. And you’ll expanding your revenue stream, making the effort more cost-effective and profitable. From entrepreneurs to established business owners, it’s a win-win.

2) Greater product offerings

You can also take advantage of the fact that these third-party offerings have already undergone extensive checks and tests for quality and safety. This limits your company’s risks and exposure once they’re officially on the market. This is another advantage over reseller partnerships, which could leave your brand compromised if your partner experiences a recall.

When you work with a white label agency, you’ll also empower your company to reach new heights and try for new commercial opportunities. Projects that might have appeared daunting before will suddenly seem doable. With that weight lifted, your in-house team members can focus on their core strengths.

3) New business opportunities

Another benefit to keep in mind? Working with a white label partner can also allow your company to forge new business relationships. You’ll gain access to an entirely new network of professionals who can help you reach a wider customer base and expand into greater territories.

Top concerns with white-labeling

While white-label solutions can be undoubtedly beneficial and cost-effective, it’s critical to keep a 360-degree perspective. This includes assessing the risks involved in the effort.

Intellectual property theft

First, there’s always liability involved when intellectual property is exchanged. When a third party shares its intelligence with another company, this opens the door to potential theft. For instance, a specific product design might be trademarked for one company, but it could be unintentionally exposed by a white label company. This can apply to physical production, as well as digital marketing or web design services.

In addition to stealing a company’s design, an unscrupulous white label partner could also poach the clients or customers of the other party. For instance, if a service provider is interfacing directly with your clients, they could steer those clients away to a competitor’s (which they also support).

Competing ownership

In a similar vein, there can be a lack of defined ownership and project management in these partnerships if clear parameters aren’t defined at the outset. This can muddle the production process and strain relationships, so it’s important to clearly outline who is responsible for each step, and what that task will include.

Otherwise, the result will be a mismatched solution that ultimately fails to deliver on expectations. To deliver a truly seamless customer experience, all parties must be on the same page from the beginning. There should also be an inherent level of trust as a primary foundation.

It’s imperative to get contracts in writing. Before entering into this partnership, develop a comprehensive white-label agreement that covers the service-level agreement (SLA).

What should you look for in white-label partnerships?

Finding the right provider is key with any white-label service. Yet, this step can quickly veer off-track if you aren’t sure what to look for. As you get started, here are 10 can’t-miss requirements to prioritize:

  • Strategic alignment with your company vision
  • Cohesion with your work culture and values
  • Years of experience and industry-specific expertise
  • Clear and transparent contract terms
  • Solid, well-reviewed reputation and track record
  • Offer the option to test-drive their product or service first
  • Experience with providing white label solutions
  • Excellent communication and project management at every turn
  • Robust team training opportunities
  • Genuine, dedicated interest in your long-term growth

White-label partnerships are just the beginning

White-label solutions can effectively expand the reach and capabilities of your business. With this setup in place, you can offer a greater number of services or products to your clients.

While the financial, strategic, and operational benefits are impressive, they’re only possible if you choose the right agency partner. There are risks involved with any kind of business relationship. You can mitigate these uncertainties by choosing a reputable and experienced team.

Convrrt is dedicated to helping our partners scale their business, delight their customers, and unlock opportunities. Our landing page infrastructure is easy to customize and deploy, so you can start seeing the growth you deserve. Sign up for a demo today to experience how it works!

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