Published May 15, 2006

White Label Businesses: Are They for You?

For those not yet in the know, white label items are simply products or services that are packaged plainly, allowing you to repackage them with your own brand and re-sell them.

Buying wholesale and selling retail is the backbone of business. So what makes these white label products different? In most cases, the original concept of buying wholesale and selling retail was that the products you bought wholesale were already branded, usually at the manufacturers' level.

Now, the manufacturers create unbranded products and sell them to retailers who brand them themselves. The idea isn't that new, I suppose. As I write this I recall a friend whose father worked at a steel plant making identical car parts for more than one car manufacturer.

But now the world of white label has moved to the Internet as an opportunity for budding entrepreneurs. If you Google "whitelabel," "white-label," or "white label," you'll find a number of people offering countless business opportunities that you can buy and re-brand yourself to re-sell.

Here are some examples of different types of white label businesses that are popular right now:

  • Web host reselling - you buy the web host space and re-sell it to others as if you are the provider.
  • E-books with reseller rights - you buy e-books and re-sell it to others.
  • Make sure your brand is readily apparent. Don't just put your logo in your ad if it doesn't include your slogan: make sure you are branding your company name, your logo, AND your slogan so that when people think of you they think of all three things.
  • Cafepress.com - you apply your brand to various products and promote them, keeping the mark-up for yourself.
  • Getestore.com - you create a store and promote name-brand products, keeping the mark-up for yourself.

Of course there are others, but these are 4 that I see a lot.

But is it worth it?

I love the concept of a "business in a box" that allows you to get a product, develop a brand, and re-sell it. As a concept, white label works.

But the danger I see with white label businesses is a whole group of people trying to move the same product at close to the same price. There is little or no differentiation from one to the next. It's like going to a car dealership to buy a car but when you get to the lot they only have one kind and color of car, all at the same price. There is little choice.

When there's no differentiation, there's no hope of ever making a decent income from your product. That's a shame because many budding entrepreneurs look at this opportunity as their ticket to quit their job and live the small business owner's life they've always dreamed of. But because of the glut of similar products on the market, there's little hope to turn a profit.

Here are two ways that I think a white label reseller can actually make money from it.

  1. Differentiate like crazy! Whether you do this by tightly defining your niche or by assembling several white label products together, or in the customer service you provide, however you do it, YOU NEED TO BE DIFFERENT!
  2. Use these items as ancillary products to your main line-up, not AS your main line-up. That way, you're not relying on them to make you the money you need to quit your job (or feed your family or pay your bills) but rather they're acting as up-sell opportunities for additional profit.