What is a 'White Label Product'
A white label product is manufactured by one company and packaged and sold by other companies under various brand names. The end product appears as though it has been manufactured by the marketer. The benefit for the manufacturer and the marketer is that the manufacturer can concentrate on making the product or service and focus on cost savings, and the marketer can invest in marketing and selling the product.
BREAKING DOWN 'White Label Product'Businesses large and small use white label products and services to expand their offerings and increase revenue. White label products are easily spotted on store shelves, as they are the products retailers sell with their own brand attached, commonly known as the store brand. The products sometimes are sold at a discount relative to other well-known brands.
Some online businesses without the resources to invest in the infrastructure, technology or personnel to create products and services use white labels to launch successful brands. Companies that produce white label products and services sometimes grow larger than the business that buy from them, due to the volume they produce for various retailers. The use of white label products and services is considered a form of outsourcing.
White Label Products
Electronics companies often sell generic white label products under their own brands. Typical white label products include radios, DVD players, computer mice and keyboards, and TV remote controls. Major electronics brands that invest in technology to design and manufacture higher-end products, such as high-end mobile phones and computers, often put their brand names on cheaper-priced white label electronics to expand their offerings. This is why some consumers may notice that two DVD players sold under different brands, for example, are exactly the same.
Supermarkets and big-box retail stores also sell numerous white label products featuring their own branding. Whole Foods Inc.'s 365 products and Costco Wholesale Corporation's Kirkland products are examples of store branding on white label products.
White Label Services
Businesses, such as banks, use white label services such as credit card processing when they do not have such services in house. Some businesses, that have no banking operations offer branded credit cards to their customers; this is also considered to be a form of white labeling. For example, L.L. Bean Inc. offers its consumers a branded credit card; the card is actually provided by Barclays Bank Delaware. Macy’s also offers its consumers a branded card; the card is actually provided by American Express.