Picture yourself in the grocery store. You’re looking for facial tissues. Typically, you’ll have several familiar brand options. But there will also be a store brand. That’s a white-label product that your Publix, Piggly Wiggly, or Food Lion has made its own. It happens with everything from grocery shelf staples to cloud-based software solutions. Here’s how your small business can become a white-label vendor too.
As a white-label vendor, you don’t receive credit for your product. Another business purchases your product or service to sell as its own. It takes your offering, brands and markets it, and, typically, makes a profit from a markup over what it pays your business. White labeling lets a company:
- Expand its product line or service offerings quickly
- Avoid the difficulties of product development
- Benefit from your expertise and R&D efforts
- Meet audience demand to improve brand loyalty
Your business benefits too from becoming a white-label vendor. You grow your business with private labeling. You also find an outlet for any surplus inventory. Plus, once you develop a private-label partnership with a major brand, you may be able to expand that relationship into other product areas as well.
To become a white-label vendor, you will need to take the following steps:
- Develop a high-quality product
- Do your research
- Know different industry regulations
- Market your private-label line
- Be innovative
- Emphasize partnership
Develop a High-Quality Product
Store brands are a popular option for many consumers. In 2019, private labels grew 4.1%, three times as much as national brands, for a gain of $5.4 billion, according to the Private Label Manufacturing Association (PLMA). Why? They offer reliable quality along with cost savings.
The reseller, though, has to be able to count on the quality of your product. Their brand name is on the product in the end. “High quality across the board – from ingredients to the supply chain, from the packaging and labeling to the final product itself – is the number one requirement,” according to the PLMA.
Do Your Research
You must understand what the market looks like and what products and services are needed. To anticipate buyer demand:
- Dig into census data to understand consumers
- Do a competitive analysis
- Review research findings predicting areas with growth potential
- Consult sourcing activity reports
- Research stats and trends to determine prospects’ needs
Know Different Industry Regulations
Private labeling is possible in nearly all food and non-food grocery categories as well as over-the-counter drugs, cosmetics, or household and laundry products. White-label vendors might sell lawn and garden chemicals, paints, hardware, auto aftercare, stationery, and housewares, and more. Then, there are the services from IT help to insurance policies, and so much more.
Your business will need to know the industry regulations for that particular product. Some certifications could help with white-label vendor credibility, whether it’s around sustainability or process quality.
Market Your Private-Label Line
Just as your business needs to market itself to reach end customers, you’ll need to have a plan for communicating with prospective private-label buyers. You might design a specific white-label website. Or add an area to your existing business website that focuses on reseller needs. Create landing pages that explain who you are, what your business offers, and how white labeling can help them.
Focus your marketing to reseller prospects on making it quick and easy for the buyer to get the answers to their questions about what you do and how the relationship would work. Provide appealing, interesting content that speaks to challenges and addresses how partnering with your business will benefit the buyer.
The consumer has grown accustomed to white-label products (even if they wouldn’t know to call them that). Private-label products now represent a real profit avenue for major retailers. The next step is to expand that reliance on the retailer’s store brand options by offering new products targeting specific market niches. Your business can capitalize on this by adding new offerings to its product lines. For instance, a bakery might add gluten-free, reduced-calorie, or heart-healthy loaves of bread to help its grocery store retailer better meet changing market demand.
Providing unique products can help solidify your value as a white-label vendor of choice. The reseller counts on your team to know the ins and outs of manufacturing your product and save them the effort of learning all about that particular process. So, don’t rest on your laurels. Instead, be innovative and reinvest some of your white-labeling revenues into new product research and development.
Once you become a white-label vendor, focus on building long-term relationships with your resellers. You can do this by:
- Being communicative and transparent
- Soliciting their input into new product ideas
- Offering marketing support
- Sharing product, market trend insights
- Trying to anticipate their future needs
- Ensuring high-quality standards are met
Become a White-Label Vendor Today
Private-label competition is fierce, but it can be very rewarding. By offering quality, understanding the market, innovating, and being a partner that resellers can count on, your business can expand its reach and grow its revenue.