White Label vs Private Label: What's the Difference?

In the world of retail and manufacturing, white label and private label products have become increasingly popular. But what exactly is the difference between the two? In this article, we'll delve into the distinctions between white label and private label, helping you understand which option is best suited for your business.

Differences Between White Label and Private Label

White label products are typically generic products that are produced by one company and then branded and sold by another. For example, let’s say Hilton Hotels wanted their own Hilton Lager. We could rebrand and repackage our Good Robot Lager, complete with Hilton’s brand assets and name. If Disney decided they wanted a Disney Lager, we could use this same recipe and simply rebrand the packaging. White label products are often mass-produced and offer little customization or branding opportunities.

Private label products are also produced by one company but are specifically tailored to meet the branding and marketing needs of another company. For example, if Hilton wanted an exclusive wine that only they could sell, that would be a private label product that we tailor to their specs. This allows the buyer to have more control over the product's packaging, branding, and overall customer experience.

By choosing the right label strategy, companies can effectively differentiate themselves in a competitive market and build a loyal customer base.

Advantages of White Label Products

One of the key advantages of white label products is the cost-effectiveness they offer to businesses. By leveraging existing products and production processes, companies can save on manufacturing and development costs, ultimately leading to higher profit margins. Additionally, white label products enable businesses to enter new markets or expand their product offerings without incurring significant upfront expenses.

Another benefit of white label products is the speed to market they provide. Since the products are already developed and tested, companies can quickly launch new products without the lengthy research and development process.

White label products allow businesses to focus on their core competencies, such as branding and marketing, while leaving the manufacturing and production aspects to the suppliers. This division of labor enables companies to allocate resources more efficiently and concentrate on building a strong brand presence in the market.

Examples of Successful White Label Brands

Several successful companies have leveraged white label products to enhance their product offerings and reach a broader audience. One notable example is AmazonBasics, Amazon's private label brand that offers a wide range of consumer electronics and home products. By partnering with white label manufacturers, Amazon has been able to provide customers with affordable yet high-quality products under its own brand.

Another example is Kirkland Signature, Costco's private label brand that covers a variety of product categories, including food, household items, and clothing. Kirkland Signature products are known for their quality and value, attracting loyal customers who trust the brand's commitment to delivering premium products at competitive prices.

Benefits of Private Label Products

Unlike white label products, private label products are specifically tailored to meet the branding and marketing needs of a particular company. This customization allows businesses to have more control over the product's packaging, design, and overall customer experience. Private label products are often developed in collaboration with manufacturers to ensure that they align with the brand's values and identity.

One of the key benefits of private label products is the exclusivity they offer to companies.

Another benefit of private label products is the higher profit margins they can generate compared to reselling white label products. Since private label products are exclusive to the company, businesses can price them competitively while maintaining healthy margins.

Choosing Between White Label and Private Label

White label products are suitable for businesses looking to quickly expand their product offerings and enter new markets without significant upfront investment.

For example, let’s say you’re a winery. You’ve had customers inquire about your beer selection, which is limited. Those customers reluctantly have a glass of wine but know they won’t come back. You could supply some local craft beers, which would satisfy those customers but hurt your margins. You could brew your own beer to maintain brand consistency and maintain your margins, but you don’t have a brewing license, brewing equipment or knowledge.

Enter white label beer. You can take a high-quality lager from an award-winning brewery, like Good Robot Brewing, and relabel the can with your branding.

Private label products are ideal for companies seeking to build a strong brand presence and differentiate themselves through unique and exclusive products.

For example, using the winery example above, you still want an in-house lager or IPA, but you want the recipe, packaging, branding and more specifically tailored exclusively to your winery so that other wineries, cideries and breweries cannot copy that product.

Companies with limited manufacturing capabilities may benefit from white label products to test new markets and product ideas. In contrast, businesses with a strong brand identity and loyal customer base may find private label products more aligned with their strategic objectives.

Ultimately, the decision between white label and private label products should align with the company's overall business strategy and market positioning (obviously, we know). By carefully evaluating the advantages and limitations of each label strategy, companies can make informed decisions that support their growth and sustainability in a competitive business environment.

White Label vs Private Label in Different Industries

In the consumer goods sector, white label products are prevalent among retailers looking to offer a diverse range of products at competitive prices. These products are often sold under the retailer's brand name, like Kirkland Signature, providing customers with affordable options across various product categories.

Private label products are commonly found in industries such as cosmetics, skincare, food and beverage, where brand identity and product quality are critical differentiators. For example, Best Western offers an exclusive aluminum-bottled water program for all Best Westerns in North America. The bottle, branding and program are exclusive to Best Western.

In the fashion and apparel industry, white label products are popular among online retailers and boutique stores looking to offer trendy clothing and accessories to their customers. These products are often sourced from manufacturers and customized with the retailer's branding. In contrast, private label products are common among luxury brands and designer labels that prioritize exclusivity and craftsmanship in their products.

Conclusion: Which is the Better Option?

Both white label and private label products have their advantages and limitations, and the decision between the two should be based on a thorough assessment of the company's goals and resources.

Are you looking for a custom beverage for your company, event or wedding? Contact us today to learn more about white label and private label beverages in Atlantic Canada.