White labeling and private labeling in print on demand dropshipping business
There are several ways you can do business. You can manufacture your own products, you can sell services, you can have a dropshipping business or a retail shop. Or you can own a white label or a private label business. To learn more about what is white labeling and private labeling and how it ties in with dropshipping business keep reading!
What is white labeling?
White labeling means that the end product is not manufactured by the company on the label. Usually, a big manufacturer sells their products to different brands and then these brands sell these products to customers as their own.
For example, there is a rice manufacturer in Indonesia. They sell the rice to different U.S. brands in bulk. Then these brands package the rice in smaller containers, add their labels and make deals with shops to sell that rice. The branded rice products are white labeled since there is no reference to the original manufacturer and the brand that is selling the rice is not actually the one that is manufacturing the product.
What can be white labeled?
In short, any product can be white labeled. It is a normal process in today's economy. There are factories that make things in bulk, and then there are smaller businesses that market and sell these products. The things made in factory production can vary from canned goods to toys and gardening tools.
What is not white labeling?
If you are creating a custom product and you ask a factory to fulfill your order by your directions, and they do not sell the same product to anyone else, it is not white labeling. White labeling is only when there are already finished products that you buy and add your marketing (aka label) to them.
Is print on demand dropshipping white labeling?
Print on demand is white labeling mixed with customization. The bases of your products (the t-shirt, tote bag, hoodie, etc.) are white labeled since they are already manufactured. You don’t have the liberty to change them, and you pass them on as your products. However, the design you put on the items is all you.
History of white labeling
The term white label comes from DJs of the 20th century who would tear off the labels of vinyl records or cover them with a white label to conceal what record they are using.
However, the way white labeling works nowadays was born in 1990ties when big supermarket stores started making their own product lines which all were white labeled. White labeled supermarket products are a win-win situation for both the customer and the store – the store gets most of the profit while a customer can buy the same products without the added cost of the brand.
Benefits of a white labeling business
White labeling is popular for a good reason, it has a lot of benefits. Let’s see what they are!
Easy to start
White labeling is perfect if you want to start a business and want to do it quickly and without big investments. You just need to find a manufacturer that will make the products you want and order in bulk or if possible order only when there is demand. By choosing white labeling, you avoid the hassle of owning a manufacturing center and starting that part of the business from scratch.
A few upfront costs
Since you don’t need to invest in manufacturing equipment and raw materials, you can pay for already-finished products. It significantly reduces the cost of starting and owning a business.
It can be a side business
A white label business is perfect for an additional income, for example, creating a merchandise line. Whether you are a content creator or retail shop owner, you can get additional sales by creating fun merchandise with your company’s logo, catchphrase, or motto. And white labeling is ideal for it.
Cons of a white labeling business
Aside from the good a white label business can offer, there are some cons.
Not a unique product
A manufacturer that offers white labeling their products have a lot of goods and they sell the same item to all of their clientele. The only difference is the label and the marketing you add to your product. With the exception if you do print on demand dropshipping, then the design you create works as a unique offer to your customers.
Because the products are similar, the competition can get high. You are competing not only with other brands that buy from the same manufacturer, but you are also competing with other white label products in the same category.
No control over manufacturing
Even though it is a bonus that you don’t need to work out manufacturing details, it can also come as a con, if there is something you would like to change about the product. In short, when choosing a product for a white label business, there is nothing you can change about the product itself. You can either look for another supplier or choose to switch to a private label.
What is private labeling?
Private labeling means that you contract a manufacturer and the manufacturer creates products based on your specification. For example, if you want to sell leggings, you go to a manufacturer that makes leggings but you give them specific directions on how you want your leggings to be made. You can customize the fabric, fit, sizes, etc.
Is print on demand dropshipping private labeling?
Print on demand dropshipping is a mix of white labeling and private labeling since you use already-made products like t-shirts, tote bags, etc, but you add your own design to them. The design is custom-made to your specifications just for your company, so this part of print on demand is a private label.
Benefits of a private labeling business
As well as a white label business, a private labeling business also has benefits.
Control over customization
One of the biggest benefits of a private label is the control over customization. It means that you can create the product of your dreams – customize the size, color, materials, etc. If the manufacturer also offers dropshipping, you can customize the packaging as well.
Easy to make quick changes
Need to add more sizes? Need to change a neckline to your custom-made t-shirts? If you are having a private label, it is easy to adapt and change the details of your product. Just hop on a quick call with your manufacturing manager, and it is done!
You set the price
Since the products you are creating are custom-made, there are no true equivalents in the market so you can set the price entirely. Of course, you need to take into account the manufacturing costs and other expenses, but other than that, you can set your own price.
Cons of a private labeling business
As with everything, private labeling also has some cons. Here they are.
Higher cost compared to white labeling
Since you are making your own product, it does mean that the price for manufacturing will be higher compared to white labeling. Of course, you get all the benefits, but still if looking just at the finances, it will be a bit more expensive.
Finding the manufacturer can take time
You have a specific idea for a product and you need someone who will execute it well. Finding the right partner for that job can take time. They need to have the right equipment, good pricing options, and an understanding of your business needs.
Don’t have control over the manufacturing process
Even though you have control over customization, you are still ordering your products from a third party. They have their inner processes and politics that you are not a part of. However, if you are working with an honest manufacturer, they will have nothing to hide.
Print on demand dropshipping business customization
Let’s explore a little bit more how you can make a print on demand product truly a part of your brand if you work with us, Printseekers.com.
The best way how to make a product a part of your brand is by adding a label with your brand name or logo. If it is a possibility, definitely use it!
Customize your packaging or send them as gifts – commercial stickers can add to the marketing and branding of your business.
Do you want your customer to receive packages in boxes or bags? What are they made of – paper, plastic, plant plastic? You choose what represents your brand the best!
Thank you card
Customers are your number one priority so if you want to include a thank you card for every package, you can do it!
Custom coupons for a returning customer? Yes, please! Add coupons to every package that goes out. And not just any coupons. You can customize the design, look, paper, and information.
Going for a classy move? Add a business card to your orders. You can customize to the smallest detail what the business card will look like.
White labels and private labels are business models that have lots of benefits. Print on demand dropshipping business draws somewhere in the middle and can truly be a great blessing for someone who wants to start their first online business. Explore all the options and choose the best opportunity for your needs!