What Is Best For Your Business? White Labeling vs. Private Labeling vs. Custom Manufacturing.

What Is Best For Your Business? White Labeling vs. Private Labeling vs. Custom Manufacturing

Whether you’re selling products on an e-commerce website or intending to get them on store shelves nationwide, the right manufacturing partner can make all the difference. When introducing a new product, the decision of whether to use white labeling, private labeling or custom manufacturing will have a direct impact on your bottom line.

By understanding which option is best for your business, you can choose between white-label products, private-label products or custom manufacturing with confidence.

White-Label Products

White-label products are the fastest and cheapest to manufacture, because there is essentially no customization that takes place. All of the details related to the manufacturing of the product are determined by the manufacturer. The retailer has no options to alter factors such as the product’s materials, ingredients, features, characteristics or appearance.

The result is a generic product that is very inexpensive to manufacture, but doesn’t vary from what other retailers are selling. The only thing that would differentiate your product form that of a competitor is that your logo and branding will go on the product packaging. 

Because of this, white-label products are well suited for entrepreneurs who want to jump in on trending product categories without the need for a significant upfront investment. You’re not concerned about having a unique product idea or manufacturing the items yourself. Instead, the goal is to quickly enter the market in that particular product category.

You’ll rarely see a store (online or otherwise) comprised exclusively of white-label products. Instead, these items are often used to quickly expand an online store’s product offerings, or to provide branded supplemental items for a service-based business. This could include products as diverse as phone chargers and essential oils.

In this case, it’s not necessarily the product itself that makes the sale — rather, it is your already-existing branding as a company or influencer.

Private-Label Products

Private-label products are often confused with white-labeling, but there are some key distinctions that make them their own distinct category.

Private-labeling allows a company to essentially create its own “line” of products that are sold with its branding — even though they are manufactured by another company. In some cases, they could even be made by another major brand — such as how Costco’s Kirkland Signature brand coffee is actually made by Starbucks. This and other similar manufacturing agreements haven’t kept Costco’s private-label line from recording $59 billion in sales in 2021.

While identical white-label products can be sourced from one manufacturer to dozens of companies, private-labeling typically involves a more exclusive agreement. The manufacturer agrees to a small set of alterations to its generic product, without going so far as to be considered fully custom. The finished product will carry the retailer’s branding. At the same time, the manufacturer can similarly alter their generic product in private-label agreements with other stores. 

Since there is more customization, private-labeling typically requires larger minimum orders and more lead time for full production than white-labeling. The final products are somewhat unique, but still generally not distinct enough on their own to have unique selling points. 

Because of this, the strength of the private-label product still lies with the brand itself. Private-labeling is generally best when you plan to introduce several unique items within a broader product category — such as food, personal care products or clothing. Like the Kirkland Signature brand, many private-label product lines primarily differentiate themselves on pricing and their similarity to “name brand” products.

Custom Manufacturing

Custom manufacturing is a much more time- and labor-intensive process than white-labeling or private-labeling. The retailer is generally much more closely involved in the product design, resulting in more distinct features and appearance than you would get with white-label or private-label products.

Because of the more experimental nature of custom manufacturing, products will generally need to go through several prototyping stages and test runs to ensure that they meet the desired level of performance. Changes may need to be made throughout the design process to achieve the level of quality or cost-effectiveness that you want. 

However, the final product is 100 percent unique to your brand. The manufacturer cannot use the product as the basis for generic items produced for other retailers. As a result, manufacturers will generally charge much more for fully custom products, and will require a longer design and manufacturing process to get the finalized products ready for shipment. As a result, retailers typically need to sell these items at a higher price point than generic products to recoup their design and manufacturing expenses.

Custom manufacturing is best used when the goal for your business is to sell truly distinct products. The goal is to build the brand thanks to the unique selling proposition offered by the products, rather than using influencer authority or the “cheaper, but same quality” selling point of more generic items. 

While custom manufacturing carries more upfront costs and potential risks, a one-of-a-kind product that is truly distinct from the competition can provide a powerful boost to your brand. A flagship custom product can boost sales of private-label and white-label products that you also sell through your store.

Find What’s Best for You With Manufactured

Depending on your company’s needs, you might find yourself focusing primarily on private-label products, or incorporating a mix of all three manufacturing categories. Quite often, the right manufacturing option will come down to the type of product you are trying to add to your lineup.

Of course, the more types of products you need to manufacture, the harder it can be to find quality vendors that meet your needs. This is where Manufactured can help. Manufactured offers access to a network of over 500 global partners, allowing you to prioritize partnerships based on your priorities, be they USA manufacturing, production speed or cost-effectiveness.

Whether you’re looking for a single manufacturing partner or several, our network will help you find reliable partners who you can built a lasting relationship with.

Manufactured works with several different types of vendors including: jewelry manufacturers, custom leather wallets, clothing manufacturers in usa

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