The Ins and Outs of Ecommerce White Labeling

Building an exceptional brand is one of the most difficult components of succeeding in the ecommerce space. In an increasingly brand-focused economy, the time and resources necessary to build loyalty from customers and make inroads into a crowded market can be daunting.

But that’s not the only way to have a successful home furnishings business. Many manufacturers opt to sell products under a white label brand rather than their own brand name.

The practice of white labeling is when a retailer is given permission to sell an otherwise branded product from a manufacturer, under their own brand name. The retailer then assigns the product a new brand name, product name, and UPC. This takes the brand-building component out of the manufacturer’s hands, allowing them to sell under a retailer-created brand name, reap the rewards of retailer-driven marketing and exposure and tap into a more brand-centric customer base.

White Labeling Can Benefit Both Manufacturer and Retailer

A white labeling relationship can be mutually beneficial for both the manufacturer and the retailer.

For manufacturers, white labeling moves products under a retailer-backed brand name that is promoted and advertised by the retailer. It allows manufacturers to work much more closely with retailers and reap the newfound benefits of their marketing.

“The white labeling process lets a manufacturer put on the cloak of a different brand identity,” said Kim Greco, BrandJump Brand Manager. “That different identity really allows you to align with the retailer’s creative concept and by default, that tends to get you more exposure and marketing visibility.”

White labeling also leaves the brand-building work to the retailer. Instead of sourcing and developing a product line on top of building a brand, it allows manufacturers to focus on what they do best: creating desirable products.

“The white labeling process lets a manufacturer put on the cloak of a different brand identity. That different identity really allows you to align with the retailer’s creative concept and by default, that tends to get you more exposure and marketing visibility.”

For retailers, white labeling lets them sell products from a variety of manufacturers under a single brand name, without the complications of sourcing the manufacturing. It also gives retailers the flexibility to circumvent MAP pricing and sell units at a lower price point.

While every situation is different, some retailers have fully embraced white labeling and seen great levels of success. Wayfair has done an incredible job at building out “their brands” utilizing a white label strategy. Each of their brands is targeted towards a certain style and price point across various home furnishings categories. Because Wayfair promotes these brands more heavily, customers become familiar with them and, as a result, in many cases, these brands are more frequently searched for than the manufacturer’s name (even though it’s the manufacturer’s product). Other retailers have similar strategies, like Williams-Sonoma and Lulu and Georgia, though with them, white label is pretty much the only option.

The Decision to White Label Must Align with Your Brand’s Goals

While white labeling can be an effective strategy, it shouldn’t be viewed as an all-or-nothing approach to improving sales. White labeling isn’t a binary process—meaning, you can choose to white label your entire assortment, part of your assortment, or none of your assortment. The flexibility allows you to create the best game plan for your brand and assortment of products.

Before even exploring the white labeling process, make sure it aligns with your goals and have clear expectations for what you hope to achieve through this option.

Here are a few things to consider when determining if white labeling is best for your product line:

White labeling doesn’t make sense for a manufacturer if:

• You and the white label brand aren’t a great fit. Retailer white label brands are highly selective with selling products under their brand name. Make sure both your products and the white label brand’s aspirations are in lockstep. If the infusion of products doesn’t perfectly mesh with their creative vision, the relationship is doomed from the start.
• Your brand or specific collections have amassed a certain level of cache already. White labeling could cheapen your brand and confuse customers who recognize your product.
• You have hopes of growing your own brand. You won’t become a household name by opting to white label all of your products, because the end customer will never even hear your brand name.

White labeling makes sense if:

• You and the retailer appear to have a good fit, meaning you and the white label brand are aligned on style, price point and quality. White labeling isn’t always a cut-and-dry decision. It’s a choice based on a variety of factors including your goals, the manufacturer-retailer fit and projected customer interest.?
• You prioritize sales and profit over becoming a well-known brand name. A successful white label partnership lets a manufacturer focus on sourcing and product development, while they piggyback off a white label brand’s established name and success.
• “Customers are magnets to strong lifestyle brands,” Kim said. “If the fit and opportunity present itself, it makes sense why manufacturers would be interested in white labeling with a strong retail partner and tapping into that marketing and creative firepower.”
• You aren’t sure what direction you want to go long term. One of the major benefits of a white label strategy is that it doesn’t have to be an all-or-nothing approach. Work with your retailer to identify select SKUs in your assortment that either: a) don’t have the same level of recognition as your most iconic items or b) fit especially well within the white label brand creative vision. This option lets you tap into a white label market without completely surrendering your iconic items or brand name.
• You’ve accepted that it will take time for your white label strategy to take hold. White labeling isn’t an overnight success strategy, so build in time for your products to gain traction.

When used correctly, white labeling can be an effective way to boost sales by folding a curated list of products underneath a popular retail-centric brand umbrella and getting more prominent exposure on a retailer’s website and other marketing materials.