Do you think you’re ready to white label products for your dropshipping business? White labeling products is a strategy that drop shippers use in an attempt to increase profit. With the right marketing strategy, you can be successful in it. In this article, I will be discussing the advantages and disadvantages of white label drop shipping to help you decide if it’s time for you to take this course or not. If you’ve already decided on this path then I’ll just point you to where you can find the perfect white label manufacturers for your niche in this dropshipper’s guide.
Let’s start with understanding what white label is all about. Techopedia defines a white label as “a product or service that is purchased by a reseller who rebrands the product or service to give the impression that the new owner created it.” It means buying a product or service from the manufacturer and placing your branding on it so you can sell it as your own for a higher price. Some giant brands do this and they have been successful with this concept. Thanks to their incredible marketing strategies!
Is white labeling the same as private labeling?
White labeling is an eCommerce term that is commonly confused with private labeling. They work in the same way, yes — the manufacturer will allow you to re-sell the product under your brand — yet, they differ in some ways. With white labeling, the manufacturer produces a generic product that brands can purchase and label as their own without altering any product features. This means many sellers will be able to sell the same product under their brand name. On the other hand, in a private labeling arrangement, the manufacturer will create a product that will be sold exclusively by the buying brand. This allows the brand to tweak the product to his liking and sell it in the market without the threat of competitors selling the same, exact item.
Simply put, white labeling and private labeling differs in the product exclusivity and rate of competition in the marketplace.
How does white label dropshipping works?
The white labeling concept involves two major players: the manufacturer and the dropshipper. The manufacturer mass produces a product and sells it on online marketplaces like Alibaba and Amazon. A drop shipper looking for products to white label to cut out costs for production will reach out to the manufacturer for a white label agreement which may involve labeling the product with the dropshipper’s brand, custom packaging, and shipping the re-branded product to the dropshipper’s customers.
Unfortunately, not all products will be more profitable with white labeling. You’ll have to conduct tests first to discover a winning product to white label. This you can do if you have an eCommerce store selling dropshipping products in different categories, a niche store, or a one-product store. It is always smart to do extensive research for a product that sells for the long term rather than a seasonal product that might lose its market before you see ROI. So before you pursue white label dropshipping, make sure that you have an evergreen product or a product that will never go out of trend.
What are the products you can white label?
When it comes to products to white label, always look for those that already have a demand. These can be accessories, apparel, cosmetics, electronics, furniture, vitamins, shoes, foods, and drinks. You’ll have a high potential for success with these product types because they’re not new and people are already consuming them. What needs work is finding the design or model that would bring you more money when white labeled. Product Mafia can help you find a product to white label through product spy.
What are the pros and cons of white labeling products?
White labeling has advantages and disadvantages and knowing them will help you prepare on the challenges you’ll likely encounter when you white label products.
When you white label a product with high-quality, you’ll be establishing your business as a reputable vendor of top-quality goods. You can also set your desired price and earn huge profits minus the hard labor. Most importantly, if things go awry, it’s always the manufacturer who takes the blame and fixes the problem encountered with white label products.
With white labeling, these are the common issues that drop shippers will face.
- Limited options for branding. Since it will be the manufacturer or supplier who creates the container, label, and packaging of the white label product based on your design, you’ll only settle on what he can produce for you.
- Limited choices of products. You’ll only choose the product that the manufacturer makes and will not be able to create something unique to sell.
- Competition is tough. It is hard to stand out from other drop shippers who market the same products, white label or not.
If you’ve made up your mind into white label drop shipping, the next step would be to look for white label manufacturers or suppliers.
How do you find white label manufacturers?
You can find product manufacturers that provide white label services through a Product Mafia subscription. This is part of the services that Product Mafia offers, we search suppliers for the winning products that we find. These suppliers are from both Amazon, eBay and Aliexpress that you can contact directly to arrange an agreement. You can find more info about our services here.
The Bottom Line
White label products may or may not work for you. Crafting a brand idea and searching for the perfect product takes time and care. But if you’re ready to get your hands dirty with the hard work and risks that come with white label dropshipping, it can pay off.