What is White-labelling?
“Generally, white label branding (it is sometimes called “white labeling”) refers to a product manufacturing and marketing practice which have been made by one company and re-branded by another company to appear that product as their own product.”
White-labelling is a business practice in which a product or service is acquired from the original provider and then is rebranded and named as your own.
The concept of white-labelling prevails not only in product development, but also occurs in the services industry to a great extent. For example, agencies offering marketing services have been utilizing this concept to offer a wide range of services to their clients under their own label.
Value of White Label Software
White label software is a software that is developed by one party and sold by another to its clients as its own. Following the white-labelling concept, the software does not carry the original developer firm’s name.
In software development, white-labelling is beneficial when big projects are undertaken. The process actually helps save time by acquiring third party services for the development of any part of the project, which can be conveniently outsourced.
In terms of finances, the costs of a white-label software solution is incorporated in the total overall pricing of your entire project. The figure charged to the end client covers the price paid to the white-label software provider. In every industry some software used for white labeling, like software development, project management, digital marketing, etc.
White-labelling saves a lot of time and therefore, makes it easier to meet tight deadlines. It also allows buyers to identify areas of the project which they may not have the prerequisite specialisations for, and thus, outsource the need to a third party which can develop it.
But the process can be complicated. The key is to have clear communication with the party whose services are being acquired. Since software development involves technical details, it is important to ensure that the complete software requirements are conveyed to the service provider, to avoid any potential errors and thereby, eradicate time wastage that may occur through miscommunication.
Advantages & Disadvantages of White-Labelling
Advantages of White Label Software
- White label software allows you to build your own name with fewer resources.
- You do not have to reveal that your software is a white labelled one, making your brand recognition easy.
- You get an option to improvise on the software acquired from your white-label software suppliers, provided they give you the flexibility to do so. This gives you additional control over the software and its features.
- It is a great way of utilizing the expertise of white-label software developers, which you may not have in-house. It’s only prudent to not attempt something in which you may not be technically sound. It saves you from any confusion and panic.
- White-labelling gives you the sense of ownership since it carries your company name when your product/software lands with your client.
- It is a good way for firms to acquire own branded software from organisations that have the skills to produce white label software at an affordable cost. This can lead to a win-win situation for both the seller and buyer.
- The extent to which it saves time is tremendous. White-labelling allows organisations to focus more on their core competencies to deliver their software/service in a timely manner. It saves businesses from the planning, developing and testing phases involved in a software development lifecycle.
- The pricing of the white-label software a seller offers with the client’s branding and name is in the buyer’s control. No matter how much is paid they will benefit from their company’s reputation and brand image when the solution is priced for their clients.
Disadvantages Of White Label Software
- Since the software comes completely developed, the technical details involved in its development will not necessarily be fully disclosed, which may keep the buyer dependent on the original developer for further changes required.
- Dealing with a third party to get your client’s problems resolved can be challenging. Any communication gap or miscommunication – especially regarding the technical requirements of the software – can be disastrous. The white-label software’s functionality must be conveyed clearly. Or else, it might lead to delays, inability to meet deadlines, and leave a negative reputation.
- White-labelling helps meet deadlines only when the software is delivered on time with the exact client requirements being met. If the software does not offer solutions the client is looking for, that time-saving is gone. Hence, the firm offering white-label software must have complete knowledge of the expectations of the user beforehand.
Software businesses are increasingly opting for white-labelling. But it needs to be followed cautiously. It is very important that the purpose-built white-label software meets the clients’ needs.
Firms acquiring this software must analyse to what extent they can let go of their control on its features. Furthermore, prospective providers who also offer after-sales support to ensure the software is maintained, should be considered ahead of those who don’t offer support.
The key here is the cost-benefit analysis. White-labelling can offer great benefits if backed by accurate planning, that involves market research for selecting the right software firm, which in turn can precisely meet the end customer’s needs.
Acquiring white-labelled software is a great way of owning software and giving it your brand name without having to actually develop it, which can be a great advantage. Especially if your firm lacks the wide ranging technical capabilities of developing software in-house.