Private and White Label: what they are and how they differ

If you’re looking to start your own product brand, there are really just 3 main paths forward.

1. You start from the ground-up and build the entire infrastructure required to manufacture your product, in addition to setting up marketing, distribution, etc.;

2. You contract a company like us, with the needed infrastructure and capability already in place, and ask us to manufacture it exclusively for you, with full control over all aspects (Private Label);

3. If you don’t care about control, companies like ours also offer standard products that you can customize with your own label/branding (White Label)

Now, the first option is obviously quite different to the other two. But Private Label and White Label sound a lot alike. Because they kind of are.

But there’s a key difference: Private Label products are specifically and exclusively manufactured to your exact specifications. White Label products are goods that the manufacturer already produces and simply agrees to let you put your unique branding on them and sell as if they were made by you.

Let’s go a bit deeper.

White Label

A very common current example of the White Label industry are Vapes. Even if you don’t partake, you’ve certainly heard of their popularity.

And while not all of them are a White Label product, a lot of them are, which is why you may have come across identical looking Vapes that nevertheless feature different branding.

That’s White Label, sometimes also referred to as OEM manufacturing (especially in China, where most Vapes come from). Said manufacturing plants there produce several variants and if you offer to buy enough of them, they’ll usually let you stick your branding on them.

Voilà, now you have yourself a Vape brand.

Other common examples of White Label products include:

Generic water bottles
Vitamins and supplements
Merchandise (Merch) such as mugs, tote bags, calendars, shirts
Store-brand groceries (Walmart, Costco, Aldi, Lidl, Tesco, Sainsburys, METRO)
Some Amazon Basics electronics
Generic medications
Store-brand cosmetics and skincare products.

So, what are the pros and cons?

Benefits of White Label

There are two main benefits of going for a White Label product.

First and foremost, it allows for a quick and straightforward market entry. Where I live, after a certain time, disposable Vapes went from this new, but still rare thing, to a product that was literally everywhere. Almost overnight.

That’s the power of White Labeling. It contrasts Private Label products in that you don’t really have to stress about the myriad details, technical or otherwise, nor do you have to pay for stuff like custom molds, flavors, ingredients, colors, etc. It also allows you to quickly swoop in on an opportunity.

Just reach out to a White Label manufacturer that carries the product you’re interested in, negotiate a Minimum Order Quantity (MOQ), pay for the goods, and then wait for them to be produced and shipped to you. The company manufacturing these goods already has the blueprint, the only thing that is changing is the branding (be it a label swap, etching your branding, packaging, and so on). From deal to product in your hand, you could be on the market in as little as a month or two.

The second benefit to White Label as already alluded to, is initial investment.

Since the shape, size, and function of the product are pre-determined and already in production, you don’t have to pay any development or tool costs. Usually, you end up paying just the per-unit cost of each product, plus transport. If you require more custom packaging for some reason, a White Label company will usually be able to accommodate to an extent, but a limit likely exists.

This makes White Labeling a practice that is valuable to people that are looking to move quick and get first-mover advantages in newly created categories, with minimum initial investment. Individuals (or companies) that are great at sales and have existing distribution and brand can use White Labeling to supplement revenue with low relative risk.

Disadvantages with White Label products

As with most things in life, there are also cons.

Perhaps the most important one is that you’re unlikely to build a lasting, recognizable brand this way. That is because what you put on the market is generic by design. And if the category proves lucrative, a competitor can just as easily set-up shop and divert sales to himself. After all, your product is identical to theirs and so the only possible difference you can make is through marketing better than your competition.

If your competition has a bigger ad budget, however, you may be in trouble. And in fact, it might be that you’re not the first-to-market with a given generic product. More often than not, someone else has likely spotted the opportunity you did, and has already made progress and captured some market share. It falls on you to unseat them and siphon away some of the demand.

Since the product is generic, many White Label products tend to be a bit of a short-term venture unless under the umbrella of a known brand—in business today, gone tomorrow, when sales dry up and another, more interesting product catches your interest. This is not a condemnation, by the way, and there are exceptions. It is perfectly possible to start safe with a White Label product, and then transition to a Private Label product if you seek differentiation.

This brings us neatly to the pros and cons of Private Label products!

Private Label

Perhaps the most popular example of a Private Label product, believe it or not, is the iPhone.

Apple decides what they want in this year’s iteration, including the phone’s dimensions, materials, computing hardware, and so on, and then contracts Taiwanese/Chinese Foxconn to build it.

Except, in the case of the iPhone, Apple is quite a bit more involved and technically capable than is the case with most Private Label brands—they do a lot of the designing, with Foxconn mostly happy to oblige even if that’s probably not always simple from a mass-production point of view.

Other ultra-popular examples of Private Label products are Amazon Basics goods. Backpacks, bedding, fitness and sports equipment, cutlery, electronics, bathroom items, pet foods and equipment, the online retail giant is probably the largest Private Label customer in the world. All these products are made by an army of specialized manufacturers like us.

We call Amazon Basics goods Private Label products, because they’re manufactured exclusively for Amazon. What’s more, Jeff Bezos’ team likely has a hand in the very specifications of each item—from its shape and dimensions, to materials use and features.

A few more examples of Private Label products you may know:

Target’s Good & Gather, Cat & Jack, Up & Up brands
Costco’s Kirkland Signature wine and alcohol
Walmart’s Great Value brand
Sephora Collection of makeup and skincare products
Many of Trader’s Joe products
Kroger’s Simple Truth, the organic/natural food brand exclusive to them
Some of IKEA’s furniture is also Private Label; manufactured exclusively for them by a third party

Benefits of Private Label

The biggest benefit to going the Private Label route is that you have a very high level of control of the final goods and those designs are exclusively yours/your brand’s. In comparison with White Label goods, this essentially creates a metaphorical moat—competitors can’t just copy your idea and marketing and as easily challenge you.

In our line of work, examples of the controls you’d have with a Private Label is your ability to pick your own, custom container, its color, shape, material and any branding you may feel is necessary. You’d also have final say on what’s inside your drink or vitamins/supplements capsules or tablets—down to the exact specific ingredient. Ditto for flavor and sweeteners. This also has the beneficial side-effect of allowing for costs control—you’re usually limited to what the manufacturer chose when White Labeling. Very generally, White Label products tend to be a bit more expensive for the buyer compared to Private Label ones, though that’s not a hard-and-fast rule for sure.

Said otherwise, you can think of Private Labeling as renting somebody else’s factory, know-how, and staff to churn out your own, highly customized (if need be) products.

As already alluded to, this lets you take full control of your brand and build for the long term. You may initially start with one product from one category, and slowly expand to others under a common brand umbrella. The benefit here is clear: if your branding is trusted and has gained traction, follow-up products have a higher-than-usual likelihood of succeeding. This is harder achieved when solely reliant on White Label goods.

Finally, due to the more involved nature of Private Labeling, clients of ours start to more intimately understand what goes into mass-manufacturing, which is actually a monstrously underrated advantage. Understanding the processes that are required to take place to go from an idea to final product can inform and shape future expansion plans and, sometimes, even serve a jolt to your imagination.

Not all great ideas come from manufacturing practitioners.

Cons of Private Label

I’ve already mentioned some of these, but let’s dig deeper: there are some cons to Private Labeling, too!

Perhaps the most obvious one is that it usually costs more (relative to White Labeling, that is) to get a custom product going.

Yes, certain concessions can be made in order to keep costs attractively low, but if you’re looking to really express a certain product vision, you’d likely request custom containers, with specific shapes, filled with certain ingredients, colored in a defined way. Perhaps you want a ribbon attached, or a neck tag (for bottles, typical with high-end Olive Oil products, for example).

Some of these features require tooling.

In our case, we create the bottle and container molds ourselves, and we seek to pass these savings on to our clients in order to be more competitive. Other parts of the equation, such as ingredients, however, are separately ordered from specialized manufacturers.

The other disadvantage of Private Label is the level of commitment required.

If you want a custom product, you’ll have to work with us to specify what exactly it is you want. There’s definitely some back-and-forth involved, but we’ve been doing this for a long while now, successfully, so we’re obviously going to offer guidance along the way.

Conclusion

The choice between White Label and Private Label depends on your business goals, resources, and long-term vision. White Label offers a quick and cost-effective entry into the market, making it ideal for testing new product categories or capitalizing on trends. However, it may limit your ability to build a unique brand identity.

Private Label, while requiring more investment and time upfront, provides greater control over your product and brand. This approach is better suited for businesses looking to establish a strong, differentiated presence in the market and build long-term customer loyalty.

Ultimately, some businesses may choose to start with White Label products to test the market and then transition to Private Label as they grow and gain more insights into their customers’ needs. The key is to align your labeling strategy with your overall business objectives and resources.

Remember, whether you choose White Label or Private Label, partnering with an experienced manufacturer like us can help guide you through the process and ensure the best possible outcome for your brand.

Chris

Hi. I'm Chris and I'm the Product Manager at our family-owned business, AMATA Ltd. Since 2016, I've been focused on expanding our Private Label presence. It took a while, but I've now helped more than a dozen international clients to manufacture their products—some of which quite complex. I made this site to hopefully interest you in joining them.