White label vs private label: Differences, examples & which to choose

• White-label and private labels models both mean you’re selling a product made by someone else, just under your own brand.

• White label is the fast track: the product’s already there, you brand it and start selling, with less money upfront.

• Private label moves slower: it’s built for you, so you get more say in how it looks and works — but it costs more and takes time.

• White label is mostly a tech/adtech thing; private label is what you see more in retail and physical products.

• In the end, it’s a trade-off: speed and simplicity of white label vs. uniqueness and full control of the private one.

Is there a battle between private label vs white label companies? Probably more confusion than battle. To explain what does white label mean in business and what is the difference between private label and white label, we have prepared this article: it will help you quickly understand the topic and discover the details of building relationships between teams in the professional product retail industry.

It is worth noting that white label and private label are similar concepts that have a common core but differ in details. In both cases, we are talking about the resale of goods or services on behalf of the company's brand. And in both cases, the products and services resold under the company's brand are produced by someone else. And that's where the similarities between private labels and white-label end. 

In all other aspects, we are talking about completely different relationships between:

• B2B vendors — owners or producers of the original product or service;

• and B2C/B2B retailers — those who resell the original product or service under the new brand.

Understanding the difference between private labels and white-label is of great importance for market newcomers. Therefore, this article was prepared specifically for beginners in retail. It presents the essentials of the two models, offering their detailed comparison, overview of pros and cons, and successful real-world examples. If you are already experienced in marketing wars, we invite you to explore the TeqBlaze white-label ad solutions right away.

What is a white-label or a white-label product?

What does white-label mean in business? The term white label, originally hailing from the music industry, is used to refer to generic products or services created by manufacturers for sale by other retailers.

The resellers can then repackage these products, put their brand on, and sell them as their own. Similarly, white-label ad tech products mean that one can buy an unbranded platform or other solutions, customize it to their needs, and resell it under their brand name.

For many companies, this is a good deal, as they don’t have to create the actual product and can focus primarily on branding and marketing. Interestingly, sometimes different retailers can even charge differently for products of the same origin, because of their position on the market.

So, one can see that such a business model works notably well for companies with already established and popular brands. Moreover, this model also offers a lot of benefits to little-known startups, as it doesn’t require huge investments or experience.

In the IT industry a white-label company has a primary focus on developing software solutions that other brands can label and resell as their own. Such white-label software has a lot of benefits.

Why do businesses choose white-label companies?

Let's review the case with ad tech white label providers; they have an existing product that they sell to other retailers who can capitalize on it. What benefits does a brand receive from it?

Reduced production costs

White-labeled software is pre-built which means it requires less labor to install or deploy (normally software development employs a lot of stages from coding to workflow organization and licensing). Here's an example of white-label DSP.

Reduced risks

Some argue that while labeling, a brand gets a generic product. However, in IT it highly pays off since the software is tested, so it eliminates possible malfunctions, bugs, and other related problems with functioning.

Simpler operation

In ad tech, the major difference between solutions built from scratch and white-label solutions also lies in user-friendliness. Such a solution is not used by one company only. Hence, developers do their utmost to make their technology intuitive and easy to operate: they adjust the user interface and make important updates and on-demand integrations.

Faster deployment

With white labeling, the brand can get the desired product much faster in comparison with building an identical product from scratch. Thanks to this retailers normally sell products much faster and thus, achieve profits more swiftly.

In ad tech, a brand adopts the same product and based on the pre-built tech core creates its own brand solution with its own brand name within several days.

Pros and cons of white label products

White-label products are all about the rapid expansion of offerings across various channels. Certainly, this approach has both upsides and downsides. Let's take a closer look at this question.

Pros of white label products

Here is the list of the most important advantages of white-label products:

• Faster time to market, as such off-the-shelf tools allow brands to launch advertising campaigns quickly.

• No need to invest in product development, which helps companies save their budgets.

• Rapid brand expansion because brands can use white-label products to enhance their portfolio and reach new markets easily.

• White-label solutions allow companies to focus on core competencies, such as sales, marketing, and customer service, while having external operational support.

• If it goes about software solutions, such systems, typically, provide features for simplified campaign scaling.

Cons of white label products

Now, let's take a closer look at some downsides of white-label solutions for advertising. These are the most common ones:

• White-label products offer limited customization because, often, you cannot significantly change the product to tailor it to your specific business needs.

• Your success is tied to the performance and reliability of the supplier.

• You may encounter brand risks because quality or supply issues from the provider will negatively affect your reputation.

• If multiple businesses sell the same product, standing out in the market becomes harder.

What is the private label or private label product?

Now that we’ve clarified the white label definition, it is time to answer the question — ‘what is private labeling?’. One can say that a company uses private label products or services if those were designed and produced for sale by another company for a specific retailer exclusively.

A private label manufacturer or private label brands create products following the resellers’ specifications, so the product is customized even before it gets labeled. That's called private labeling.

Private-label business models are widely used in the beauty industry, manufacturing, and outfit production. It is often more affordable to get these products via private labeling. This is why private label services have a huge potential.

Because of this, a typical retailer often goes to a private label manufacturer since the final product helps to compete with more recognizable brands.

For example, a retailer gets a private label product to offer a similar style of outfit for a lower price compared to other well-known clothing providers. In this case, the price is a factor that helps a retailer to become more popular than competitors.

As we can see, the concepts of white-label vs private label are somehow similar, as the mechanics of how these business models work are very much alike. Nevertheless, the definitions give hints to us that some differences are so significant that they can play a decisive role in your business strategy.

Pros and cons of private label products

Private label products appeal to companies that require more control and branding opportunities. Here is a more detailed breakdown of the main advantages and disadvantages of such an approach.

Pros of private label products

So, basically, these are the main advantages you can get while choosing a private-label solution for your advertising campaigns:

• Enhanced brand control, as this approach allows you to customize the product's design, packaging, and specifications in order to meet your branding requirements.

• Control over the brand and pricing allows you to opt for a higher profit margin.

• Unique product features are likely to ensure better market differentiation.

• By ensuring strong branding and consistent product quality, you may build a more loyal customer base.

Cons of private label products

Now, let's take a look at some principal downsides of private-label solutions that are especially relevant in the context of the private label vs white label comparison:

• In many cases, the development and customization of products require a larger initial investment compared to white-label options.

• If you start working on a private-label solution, this may delay a product launch.

• Manufacturers often require bulk purchases, which can tie up capital and increase risk.

• You take all the responsibility for quality issues.

• Sometimes, private-label systems are associated with supply management complexities, especially when it comes to timelines and inventory management.

Full comparison of white-label and private labels

Okay, so we have come to the white labeling vs private labeling comparison. The table below provides a detailed assessment of both approaches based on the same criteria. We hope that this white-label vs private label comparison is exhaustive for your needs. If not, please contact us for a consultation.

Taking into consideration the previously listed differences, one can make a rational conclusion that private labeling vs white label manufacturing models are suitable for many companies. Still, the choice must be made depending on business goals.

For small businesses focusing on physically customizable goods, a better option is private labeling, while the white label has more advantages for internet-based businesses, especially in the field of digital advertising. We will consider the advantages of private label products vs white label for different businesses in one of the next sections.

Examples of white-label and private label products

To understand the essentials of the private label vs white label products comparison, it is important to consider some real-world examples. This will showcase how the two approaches work in practice.

White label product examples

Let's start with the cases of successful usage of white label products:

• Spotify and a white-label streaming platform. While Spotify is widely recognized, several smaller music or podcast apps use white-label streaming technology provided by companies like 7digital or Tuneden. Such platforms offer a ready-made streaming solution that businesses can rebrand as their own.

• Retail banking apps. For digital banks or financial startups, it is common to use white-label banking solutions. For instance, the platforms offered by Solarisbank and Marqeta enable banks to launch advertising campaigns quickly without building infrastructure from scratch.

• Stadium Goods and Farfetch. Stadium Goods, a sneaker and streetwear marketplace successfully cooperated with Farfetch, a global fashion platform. The two companies relied on a white-label infrastructure to manage inventory and transactions behind the scenes. As a result, such cooperation allowed the two brands to extend their reach.

Private label product examples

The list of successful private-label platforms also includes several successful examples. Here we provide an overview of the most notable ones:

• Amazon Basics. Amazon Basics is a global white-label platform that specializes in selling various goods, from batteries to office furniture. It is designed and branded exclusively by Amazon but manufactured by third-party vendors.

• Trader Joe’s Food Products. Nearly all items at Trader Joe’s are private label. They are designed to meet Trader Joe’s unique taste and quality standards. However, these items are sourced by external vendors.

• Kirkland Signature by Costco. Costco’s private label covers everything from vitamins to vodka. These goods are often produced by well-known manufacturers under strict agreements.

Private labeling vs white-labeling: software explanation

Many newcomers start to get confused about the possibilities of these two models when it comes to real-life business. Using the example of a demand-side platform, let's understand once and for all what the difference is between white-label and private labels.

• White-label DSP. It's simple: you pay money for the deployment of the platform, and then you start using it under your own brand and bring other advertisers and agencies to use it. The time to start working and connect it to other adtech tools, such as SSPs or ad exchanges, is counted in weeks. 

• Private label DSP. Everything is complicated: the challenge here is that you need to find a company that will develop a demand-side advertising platform for you from scratch based on your needs, industry achievements, and other aspects. This way requires expertise both from the customer of the private label solution side and the side of the contractor. 

As you can see, sometimes white labeling vs private labeling in software development is a choice without a choice. Because a ready-made white-label solution costs thousands for a monthly subscription. While private labels will cost millions per year. 

Evolving trends in white-label and private labels adoption

Since at TeqBlaze, we specialize in information technologies and advertising platforms, we will talk about software private label or white label solutions. We emphasize that the situation in the software market may differ from the market of physical goods, as well as trends in the industry. 

The main software industry trends include the following.

1. Unlimited scalability: development teams create modern software products with the expectation that user workload requests will increase tens or hundreds of times in a short time. Software with limited scalability is a less competitive product.

2. Customization and personalization: to meet business needs, the technical team must be able to implement a feature of any complexity on request. So software products become only the first step in the long chain of unique updates 

3. Niche market expansion: as technologies have become more accessible, it is now possible to promote standalone solutions for small niche needs.

4. AI and machine learning: comparing private and white labeling, we have to say that all of them must meet market demands. This means actively involving artificial intelligence and machine learning technologies in the development of software for making data-driven decisions based on self-updating models that improve over time. 

5. Lowering the barrier of expertise: developers strive to simplify complex functionality with the help of intuitive interfaces and technical options that allow them to integrate features based on constructors and ready-made modules, which are easy to connect and test without the involvement of technical experts.

This list can be continued for a long time, but in general, the product identity of software looks like the above.

Which one to choose: private label or white-label provider?

In the private vs white label comparison, both models ensure that a reseller doesn’t have to put a lot of time and effort into the manufacturing process.

Product design and creation are usually also parts of the job the manufacturer does; although, a reseller can sometimes add specific details to the product or customize it after manufacturing. But generally speaking, both models allow you to focus on other aspects of your business and save time and money. The real split between white-label and private labels often shows up in the numbers. Private label vs white label pricing differences come down to upfront investment vs ongoing spend.

When to choose private label

The main distinctive advantage of private labeling is uniqueness. With private labeling, merchandisers get an opportunity to sell an exclusive product and worry less about competition. It also has good potential regarding profits, plus, it is easier to start without huge investments, especially when the right target niche is chosen successfully.

Private labeling is a great choice if you want to focus on delivering a specific type of product to a specific audience. Mind that costs here tend to stack early, but margins can be higher if the product and its differentiating factors land well.

When to choose white-label

The white label model is even easier and cheaper, given that the product is already developed and manufactured, so no additional research is needed from the retailer and the potential profits are higher.

White labeling gets even more promising if you already have an established client base, so the only thing you have to worry about is a good marketing strategy, the rest is done for you by the manufacturer. This is especially true for the technology sector, where the process of new solution development may take months or even years.

With white labeling, you can get a finished solution customized for your business needs within a short time, one month tops.

This way, you can start earning almost immediately and the only thing you’ll have to worry about is building your business strategy and product marketing. Besides, sometimes even already-established companies require changes and a shift to white-label ad tech platforms. The cost model is different: lower entry point, but ongoing fees, such as subscriptions, rev share, licensing, add up over time.

Best white-label solutions for digital advertisers

As we have already mentioned in the previous section, white labeling is a fairly popular and beneficial option for digital businesses, including ad tech and digital marketing. Among its principal benefits, the key point is the ability to set up a product strategy quickly and without excessive upfront costs. These factors often become critical to businesses when it comes to choosing between white labeling and private labeling. 

Private labels can also be beneficial for many retailers that strive to easily build their own products. Instead of wasting tons of time and money on developing your own solutions, which can be potentially risky, you can now purchase a pre-built platform tailored to your goals and tested on numerous other businesses.

Our offer includes several programmatic solutions, built by professionals for professionals. Work with publishers using our White-Label Supply Side Platform or choose the White-Label Demand Side Platform if you want to focus on the advertisers’ side of the deals.

Contact us to jump into the world of programmatic advertising and start growing your business from day one!

FAQ

How does white-label differ from private labels in programmatic advertising?

The difference between white label and private label in programmatic advertising is fundamental: either it is off-the-shelf software with a monthly subscription fee, or it is software designed from scratch by a team of developers under your leadership. The second option, private label, is available only to a few companies with millions of dollars in budget per year. 

What cost factors should businesses consider when choosing between white-label and private labels?

When considering such options as private label and white label, be sure to pay attention to the implementation budget for the chosen model, the time to enter the market, direct and indirect risks, the complexity of scaling and development, and the payback period. 

Can you provide examples of successful implementations of white-label and private labels solutions in programmatic advertising?

The SSP + Ad Exchange example: we have dozens of customers who started their journey as a programmatic platform provider using our white-label solution. We also have analogs of private label solution examples, where the platform owner invested hundreds of hours in customizing the platform and then bought back the program code, moved to their servers, and became independent. 

What’s the difference between white label and private label?

White label is a ready-made product you rebrand and resell. Private label is built specifically for you, based on your requirements. Here's a basic summary based on private label vs white label examples:

• White label = faster, simpler

• Private label = more control, but slower and more expensive

What are examples of white label versus private label products?

White label is common in the tech sector:

• SaaS platforms

• Adtech tools

• Payment systems

Examples of private labels can be commonly found in retail:

• Store food brands

• Cosmetics

• Clothing

What is white labeling in business?

It’s when you take an existing product, put your brand on it, and sell it as your own. You don’t deal with development. The focus is on positioning, sales, and marketing.