White labeling:
White labeling is the process of buying the product from a manufacturer, who produces it on a large scale and labeling your brand on the product. White label, as the name suggests, basically means "Blank label" i.e., you can't change the ingredients or composition, inside the package but you can customize the packaging and labeling. The product's label can be modified by the company which buys from the manufacturer to reflect the identity of their business and rebrands the product as their own. White labeling helps manufacturers to sell their generic products through multiple companies. White labeling is a faster way to enter the market.
Example:
Let's say you go to a soap manufacturer who mass produces a specific kind of soap. You can buy soaps from that manufacturer basis your requirement. You don't have the leeway to change the composition of the soap but you can customize the packaging, labelling and logo of your brand according to your choice.
Pros:
Less money in the development of the product
Takes less time to launch
Cons:
You cant control product features
Difficult to distinguish from the product of a competitor who purchases from the same manufacturer
Private labeling:
Private labeling is the process of buying a product from a manufacturer, by customizing or modifying the composition of the product according to your choice and then labeling your brand and selling it. The manufacturer sells that product exclusively only to one company/wholesaler. Private labeling can be a long process as it takes time and a team to develop the right product for your target market. Although it is difficult, it can be better than white labeling because you have greater control over the product.
Example:
Let's say you go to a soap manufacturer. You have developed an ingenious formula of soap with some unique ingredients in it, which kills 99% of germs. Now you ask the manufacturer to mass produce soaps with this formula exclusively for you. You can then package and label it with your brand and sell it to retailers or consumers.
Pros:
You can control the product features
The product can stand out among competitors
Cons:
More expensive
Takes more time than white labeling
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