Choosing the right products to sell is essential when running an e-commerce website. Consumers buy products to fulfill a specific need or want.
If your e-commerce website doesn’t sell them, they’ll leave in search of a competitor’s store. The problem, however, is that many stores sell the same products.
When a dozen other stores sell the same products, consumers won’t have an incentive to choose your e-commerce website over its competitors.
Fortunately, you don’t have to manufacture your e-commerce website’s products in-house. You can source white label or private label products.
Suppliers manufacture these products, which you can resell under your e-commerce website’s unique brand names.
While many suppliers offer both types, white label and private label products aren’t the same.
What Are White Label Products?
White label products are mass-produced generic products that are sold to multiple stores.
The stores that purchase them are allowed to resell them under their brand names. Suppliers manufacturer white label products and sell them to various stores.
The stores can then package, label, and market them under their brand names.
Generic over-the-counter medications are often white label products. They are made by the same suppliers and consist of the same ingredients, such as ibuprofen or acetaminophen, but drug stores and grocery stores sell them under their own brand names.
Many e-commerce websites use a similar approach by sourcing white label products to resell. From clothes and cosmetics to electronics and furniture, suppliers offer countless white label products for reselling.
Some suppliers offer rebranding services for their white label products as an optional service.
In other words, they’ll customize a product’s appearance so that it matches the store’s brand.
The product itself will remain the same, regardless of how many stores purchase it. Rather than forcing the stores to rebrand it themselves, though, the supplier will rebrand the product for them.
What Are Private Label Products?
Private label products are custom products sold to a single store. Like white label products, they are rebranded according to the store’s specifications.
The difference is that private label products are sold exclusively to a single store, whereas white label products are sold to multiple stores.
Private label products aren’t generic products. They are custom products.
Before a supplier can manufacture a private label product, it must receive design specifications from the store that ordered it.
Stores can specify the materials, ingredients, dimensions, and other aspects of private label products.
Amazon has several private label brands, one of the most popular being AmazonBasics. Launched in 2009, it consists of over 2,000 products, ranging from smartphone protectors and Universal Serial Bus (USB) cables to dishware and pet beds.
The membership-based retailer Costco sells a line of private label batteries. Known as Kirkland Signature, they are Duracell batteries. Duracell manufacturers Kirkland Signature batteries specifically for Costco.
Benefits of Selling White Label Products
Selling white label products eliminates the need for in-house manufacturing. Manufacturing is an entirely different ballgame than selling.
You’ll have to secure a workspace, materials, and labor. Even then, the cost of in-house manufacturing may prevent you from turning a profit.
Suppliers know how to manufacture white label products efficiently. They have the necessary infrastructures to convert materials and labor into ready-to-sell goods quickly.
As a result, it’s usually cheaper to purchase white label products than to manufacture similar products.
Because they are sold to multiple stores, white-label products typically cost less than private label products. Suppliers don’t have to customize white-label products, so they sell them at a lower cost to stores.
Consumers will perceive your e-commerce website’s products as being unique, even if they are a white label. You can add unique brand names to the packaging, labels, and marketing materials.
As your e-commerce website becomes more popular, consumers will have greater trust in its unique brand names.
Benefits of Selling Private Label Products
With private label products, your e-commerce website will have a genuinely unique inventory that’s different from its competitors. No two stores sell the same private label products.
Each private label product is designed exclusively for a single store.
You can control the design specifications of private label products. When you order a private label product from a supplier, you can tell the supplier how to design it so that the product matches your audience’s needs.
White labeling doesn’t offer this level of control. You can control a white label product’s packaging and label, but you can’t control how it’s designed.
In some cases, selling private label products can lead to increased customer loyalty.
Consumers may buy a white label product on your e-commerce website initially, but if they discover the same product available for sale at a lower cost when browsing a competitor’s store, they’ll probably choose it in the future.
With that said, white label and private label products have their own benefits.
White label products are popular among new and small e-commerce websites because of their low cost. Suppliers can churn out white label products very quickly.
Therefore, they offer white label products at a lower cost than private label products. If you’re still trying to grow your e-commerce website and establish a good market presence, you may want to choose white label products.
Established and large e-commerce websites, conversely, often sell private label products. Private label products are unique.
The supplier will use your design specifications to manufacture custom products to resell under your e-commerce website’s brand names.
The downside to private label products is that they cost more than their white label counterparts.
Most e-commerce websites don’t manufacture their own products; they acquire them from a supplier.
Rather than sourcing the same products as your e-commerce website’s products, you should consider white labeling or private labeling.