You can choose between private label and white label drop shipping when you want to start selling online. If you don’t know about private label and white label dropshipping, also called “white labeling,” you won’t be able to choose which business model to use. So, here’s a quick look at Private Label vs. White Labeling so you can learn more about these two terms.
So, let’s start:
What does “private labeling” mean?
Private labeling means selling products with your brand name on them. Most of the time, you have more control over your final products when you use private labeling. With this eCommerce model, you can make your own brand. You can also ask the people who make the products you buy to put your business’s name and logo on them, as well as follow any other packaging and branding guidelines you give them.
Most importantly, you will be the only one selling your product when you use private labeling.
What does “white labeling” mean?
On the other hand, dropshipping is a way to run an online business that involves selling different products. In this business, the model seller doesn’t have to worry about keeping track of their products. Instead, dropshipping suppliers package and ship these items for them.
Dropshipping suppliers are the companies that keep track of your products, package them, and ship your orders whenever your online store gets an order.
White Labeling vs. Private Labeling: Pros and Cons
Let’s look at the pros and cons of white labeling vs. private labeling to figure out which one is better:
Pros of having your own brand
More oversight of products
You have more ways to design and brand your products when you use private labels. Also, you can keep a better eye on how your private labeled products are made and how well they are controlled for quality.
More money in the bank
You can price your products competitively to make a big difference in your profit margin. Since you are the only one selling your products, your profit margin can grow over time as you build a base of loyal customers.
Private Labeling’s Downsides
When a company is hired for private labeling, there are usually minimum order requirements. Because of this, it costs a lot to get started.
If you don’t know how much people want your private-label products, you could end up with a lot of unsold stock. Also, it’s never been easier to return Private Labeled products.
White labeling’s Pros
Less or no costs up front
Unlike private Labeling, white labeling doesn’t have a big cost up front. You can start dropshipping even if you don’t have any money to buy products.
Chances to make a good amount of money.
Most of the time, white-label products come straight from the manufacturer or supplier. So, you can buy them in large quantities and have a better chance of making a good profit.
Business model that saves money and time
You can start selling already-made products in your dropshipping store instead of spending a lot of money and time making them from scratch.
White Labeling’s Downsides
In dropshipping, your products aren’t the only ones on the market. Instead, there could be a lot of other dropshippers with the same product listings as you. This can make it hard for you to beat other people.
Dropshipping also gives you fewer options for how to package your brand.
In the end,
There are pros and cons to both private labeling and white labeling. Startups that don’t have enough money to spend should use dropshipping instead. White Labeling, on the other hand, is for sellers who want more control over their products and are willing to pay a lot of money up front.