What is White Label and how does it work?

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White Label is a concept that is widely used today. It interacts dynamically with the current market. It is a business model that provides convenience to both companies and customers.

In this article, we will talk about companies that follow this business model. Check out what White Label is, and the advantages and disadvantages it offers!

What is White Label?
Let's start by explaining what White Label is. White Label is a business model that allows the company to avoid having to invest in creating new products and expanding its activities.

In this case, the company buys items from other producers and sells these products to its own audience, placing its brand on them.

It is a commercial partnership that benefits both iran whatsapp lead parties involved, and is widely practiced in different sectors: clothing, electronics, food, software development, platforms and other digital services.

The White Label solution works as follows: the item is ordered by a company and delivered. The company that receives it still has the possibility of customizing it according to its own strategies and visual identity.

Check out some examples of White Label:

InfoMoney: company that is part of XP Investimentos;
Cronos Fintech: a company that enables the creation of digital banks (this way, other companies have the opportunity to develop their own banking platform or application);
Shopify: from this e-commerce platform, other companies can create their own e-commerce without the need for coding (with just a few clicks, the company can create its own e-store).
How did White Label come about?
The first instances of White Label date back to the 1980s, in the American hip-hop scene. At that time, record companies began sending CDs with ready-made songs to famous singers, so they could play them at shows.

The songs did not belong to these singers. However, as they needed innovations for their shows, they took possession of these songs and gave them visibility.

Later, in 2001, e-commerces began granting lines so that other companies could sell their goods in exchange for commissions.

How does White Label work?
After understanding what White Label is, let's explain in more detail how it works. A company comes up with a product idea or needs software to make its routine more organized. Then, this company seeks the help of another company, qualified to develop the product it wants.

The partner company assumes responsibility for implementing the process to bring the idea to life, which involves acquiring raw materials, developing, producing and testing the developed solution. At the end of everything, the partner company delivers the finished solution so that the other company can take charge of selling it.

In White Label, there is no exclusivity contract. As an example, consider that a company specialized in software development can market its solution to as many companies as it wants.

When to use the White Label solution?
If the company does not have the technology to match or a manufacturing plant, but still needs an effective and fast solution, one solution is to look for a White Label company.

If the issue involves digital solutions and the company needs a partner to automate processes, a good option is to hire a White Label to produce specific software. Just remember that developing software from scratch requires investing time, effort and money . Therefore, a good option is to hire a company that already does this work.

With a White Label partner, a company can dedicate more time and attention to the most relevant business objectives . There is no need to manage projects that go beyond its scope.

What are the advantages of White Label?
There are many advantages to hiring a White Label company. If you haven’t hired this service yet, check out some of the benefits it offers:

qualified professionals: White Label companies are specialized in the products/services they offer, that is, the company that hires their work has access to a team of professionals who focus on the continuous improvement of what they manufacture;
low costs : the solutions offered by a White Label have much more affordable costs when compared to developing the solution using your own resources;
testing and approval: in most cases, the solutions offered by a White Label have already been tested and approved on the market.
What are the disadvantages of White Label?
To fully understand what White Label is, it is important to know not only the advantages it offers, but also its disadvantages. Let's look at some of the disadvantages of this business model :

lack of exclusivity: as there are no copyrights on the solutions presented, they can be offered to different companies, regardless of whether they are competitors;
Customization limitations: whenever the model focuses on SaaS (Software as a Service), limitations may appear to customize applications and platforms, as well as resource limitations;
difficulty in adapting: even if there is a lot of flexibility in the construction of the product, it is possible that the solution that the company needs cannot be implemented at the moment.
What are the differences between White Label and Private Label?
Unlike White Label, Private Label develops the manufacturing or product development process exclusively for a specific company.

Therefore, even if a company is not responsible for creating a certain item, it has exclusive rights over it and can even ask the manufacturer to use very specific processes or formulas. Therefore, we can say that:

White Label does not offer exclusivity over the products it creates and delivers to companies that hire its services;
Private Label offers exclusivity over the products it creates and delivers to companies that hire its services.
We present an overview of “White Label”. We talk about what White Label is, its advantages and disadvantages, and how this business model works. We also show how it differs from Private Label. White Label can be a relevant differentiator — think about it! Analyze the possibility of using this solution in certain situations.