White labelling refers to a business model in which a company takes on a product or service that has already been developed by external providers and markets it under the own brand drives away.
The original manufacturers or suppliers remain responsible for development, production and technical operation. The company marketing the product, on the other hand, brands the product with its own name, logo and design, and acts as the supplier in dealings with customers.
White-label solutions are commonly used, for example, in:
- Software and digital platforms
- Apps and online tools
- Financial and payment services
- Cosmetics and personal care products
- Food and drink
- Clothing and accessories
- E-commerce products
- Consultancy and agency services
How does white labelling work?
The typical procedure is as follows:
| Step | Meaning |
| Select a product | A company finds an existing product that suits its own target audience and brand. |
| Conclude an agreement | Manufacturers and distribution partners set out the terms of use, prices, services and responsibilities. |
| Customise the offer | The logo, colours, packaging, user interface and communication are tailored to the company’s own brand. |
| Market a product | The company sells the solution to its customers under its own name. |
| Provide a service | Production, technical support and operations often remain with the original providers. |
One example:
A start-up wants to offer its business customers a digital appointment booking service. Instead of developing its own software, it uses a white-label solution. The user interface is customised to match the start-up’s corporate identity and appears to customers as part of the start-up’s own service offering.
What are the benefits of white labelling?
White-labelling can help businesses and start-ups to:
- to enter the market more quickly
- To reduce development and production costs
- to expand its own range at short notice
- to make use of existing technologies and infrastructure
- to focus more on marketing, sales and customer relations
- to test new business models with lower initial costs
- to generate additional revenue under its own brand
White-labelling can be particularly useful for start-ups when time, capital or technical resources are limited.
What are the disadvantages and risks?
Despite the advantages, there are also potential challenges:
- Dependence on external providers
- limited scope for customisation
- minimal technical or functional differentiation
- Similar offers from competitors
- limited control over quality and further development
- possible delivery or system failures
- Dependence on prices and contractual terms
- Unclear responsibilities when problems arise or support enquiries are made
If a white-label partner offers the same solution to several companies, it can be difficult to differentiate themselves from the competition on the basis of the product alone. In such cases, positioning must focus more on the brand, service, target audience or complementary services.
What should be covered in a white-label agreement?
Before entering into a partnership, the following points, amongst others, should be clarified:
- What adjustments are possible?
- Who owns the rights to the product and the data?
- Who is responsible for maintenance and further development?
- Who is responsible for customer support and complaints?
- What quality and service requirements apply?
- Are there any minimum order quantities or fixed contract terms?
- Can the solution also be offered to competitors?
- How can prices be changed?
- What happens when a contract is terminated?
- Can customers or data be transferred to other providers?
In the case of digital white-label solutions, data protection, IT security, availability and interfaces are also particularly important.
What is the difference between white labelling and private labelling?
The terms are sometimes used in a similar way, but may have different focuses:
| White Label | Private label |
| a product that is generally largely standardised | often tailored more closely to a particular brand |
| can be offered to several companies | is often developed exclusively for individual retailers |
| Changes, particularly in terms of brand and design | Further adjustments to the design, specifications or functions are possible |
| common in software and digital services | particularly common in consumer goods and own-brand products |
However, the exact scope depends on the sector and the terms of the contract.
Which start-ups is white labelling suitable for?
White-labelling can be particularly suitable if a start-up:
- wants to expand its range quickly
- wants to test a solution on the market first
- cannot establish its own production or technology
- complements an existing product with advice or a service
- has access to a clearly defined target group
- has built up a strong brand or a good distribution channel
A common mistake is to include a white-label solution in one’s own product range without carrying out sufficient quality checks. Even if the product is developed or manufactured externally, customers associate any potential faults with the visible brand of the company selling it.
Start-ups should therefore assess whether the solution works reliably, fits with their own positioning and can be offered on a commercially viable basis in the long term.
innoWerft helps founders to assess white labelling as a potential business model or market entry strategy, to identify suitable corporate partners, and to evaluate the opportunities and dependencies involved in a collaboration. In doing so, it is also possible to examine how the offering can be clearly positioned against competitors, despite being based on an external foundation.