What Is Private Labeling?
Private labeling is when a product is developed by one company and sold exclusively by another company. The final product is branded for the specific retailer to market as their own, with no reference to the original developer.
The customization process allows service providers to design and deliver a UI that matches the unique look and feel of their brand identity to better connect with their target audience and stand out from the competition.
What’s the Difference between White Label and White Glove?
White label refers to a product or brand that is sold by multiple retailers. These products often include “Powered by” or “Sponsored by” to indicate the company that created it.
A white labeled solution allows providers to leverage an existing application as their own, support the product with their own brand identity, and create a more personalized experience for end users.
White Label Example: One Brand, Multiple Retailers
Cuscal Limited offers a white-label mobile banking app to credit unions in Australia.
- Brand: Cuscal
- Retailers: Cuscal’s product and branding is used by companies like Queensland Country Bank.
Private-Label Example: One Product, Multiple Brands
- Product: Acetaminophen
- Brands: Excedrin. ® FeverAll. ® Midol. ® Theraflu. ®
“Powered by” White Label Example
The term “white glove” refers to greater attention or care, and “white-glove service” can mean a variety of things, from increased support for deployment and marketing materials to a true partnership experience where the company is invested in your mutual success.
Competitor Private Label Examples
Private label solutions can offer great advantages for medium to large companies. A great example of a successful private label is Costco’s Kirkland Signature brand, which includes items ranging from clothes to food. Kirkland Signature generates about one-quarter of Costco Wholesale’s sales.
Amazon also uses numerous private label brands including the following:
- Daily Ritual. Chic and stylish casualwear staples for women.
- Goodthreads. Denim wear for men and women.
- Happy Belly. Packaged goods like nuts, granola, and perishable items.
- Lark & Ro. Contemporary women’s fashion and everyday classics reconsidered.
- Mae. Women’s sleepwear, swimwear, and undergarments.
- Mama Bear. Products for babies and children, such as food and multivitamins.
- Solimo. Everyday household goods including personal care, pet products, and household essentials.
- Stone & Beam. Traditionally-inspired, casual comfort home furniture and décor.
Private Label Statistics — Why Branding Matters
If the fact that companies like Amazon make frequent use of both private label and white label solutions isn’t convincing enough, consider these statistics:
- 82% of investors prioritize brand recognition.1
- 77% of consumers purchase items because of the brand name.2
- 43% of customers spend more on brands they are loyal to.
- 80% brand recognition improvement with the use of color.
Customers are bombarded with a plethora of items and services on a daily basis making a brand personality critical in developing a consumer base. A private label provider takes on the responsibility of branding, designing, and customizing the solution to your needs — eliminating your asset and development costs.
According to Statista, total retail sales in the United States for private label goods hit $5.47 trillion in 2019 and are expected to reach $5.94 trillion by 2024. These numbers are understandable when taking into account most major retail shops have private label goods such as Target’s private brand ‘Archer Farms’, and Walmart’s private label ‘Great Value.’
How Does a Private Label Work?
Service providers partner with a private label manufacturer, securing a deal to sell their products under the manufacturer’s name but with no attribution to them. Providers will then sell the product(s) independently or in support of other products.
Starting a private label brand takes the headache out of product creation. You could start your own private label and deal directly with manufacturers to produce goods that your clients will want to buy — all with your distinct branding and logo on it. Private labeling is a the quickest and most cost-effective way to get to market with a new product.
What Does a Private Label Include?
Depending on which company you work with, the extent of customizations can vary wildly. The best private label providers will work with you to tailor the solution to fit your brand, from basic aesthetic and logo changes to a fully overhauled user experience with customized features and settings. Customizable options can widely vary.
For example, when looking for a new communications platform, the most beneficial private label solutions include the following:
- Brandable customer administrative portals.
- Ability to change the UI and UX to meet specific end user needs.
- Custom interface color options throughout applicable interfaces.
- Ability to hide or remove features that providers may not want end users to have access to, without removing the functionality.
- Hard-code feature setting to both customize for specific customers and to standardize their offering to streamline selling and deployment.
- Icon, label, and product names, including navigation icons.
Examples of Customization Possible with Private Label Solutions
Private Label Considerations: Build vs Buy
For service providers who are considering a private label communications platform, building a custom solution might also sound attractive. But before deciding which option is best for your business, there are some important questions to ask:
For most providers, investing millions into building a new solution isn’t feasible. We think your approach should be to leverage the cloud, not build one.
Top 6 Service Provider Advantages of a Private Label
Service providers are in the business of providing services, and private label products do just that. It’s an attractive solution for any company looking to expand their market share or build up their clientele by extending themselves into new platforms and markets.
Private labeling can be done across all communication channels — including desktop, tablets, and smartphones — so your company name will always be present with your customers no matter how they access your services. This makes private labeling one of the most powerful branding tools available to any provider today.
1. Increased Brand Loyalty. Effective branding can create consumer trust and a connection between a product and your organization. Customers formerly regarded branded goods to be superior; however, private label items have established themselves as reliable, consistent, and high-quality products. The average American company will lose 23% to 30% of its customer each year due to a lack of customer loyalty.3
2. Speed-to-Market. Developing a new product is time- and cost-intensive, which pulls both capital and human resources away from other strategic priorities. Smaller, freelance-type personal brands can take as little as 2 years, in some cases even less, while bigger corporations can take anywhere from 5 to 10 years to build up and establish a successful brand.4 By leveraging an established private label, service providers can offer their customers an affordable, market-ready solution, with their own branding. Also, since cloud communications solutions are typically deployed remotely, they can be rapidly and easily provisioned for users.
3. Increase Revenue. By incorporating a private label solution into their product portfolio, service providers can see a 23% revenue increase with consistency across all platforms.
4. Reduced Technical Support. Since no additional hardware is required, customers are less likely to experience a service outage. This means a reduction in problem tickets, strain on the IT team, and customer outage credits. Frequently, there are additional positive rippled effects, such as lower hold times with fewer callers, enhanced customer experience, and the ability to divert precious IT resources toward strategic endeavors.
5. Increase Customer Lifetime Value. COVID solidified the need for carrier-grade, remote communication tools. By expanding your solutions to in-corporate a UCaaS private label offering, existing customers are 50% more likely to try your business’s new product and 31% more likely to spend more on their average order value with your business.
6. Easily Maintained. Cloud-based management via a central server allows IT professionals to build, change, and deploy features to all users at the touch of a button, allowing providers to reallocate valuable assets back into their company’s growth. By outsourcing a to a third-party for a private label system, service providers can offer their customers an easy solution while freeing up capital, time, and employee resources that would have been used for PBX maintenance.
The Ultimate White Label Platform Service Providers
Businesses are changing the way they communicate. Let Alianza help you meet demand with our innovative, carrier-grade, and cloud-native UCaaS solutions you brand as your own. Our market-ready technology brand Cymbus, created for service providers, is a cloud communications solution that encompasses our entire business communications suite of new and existing products.
Desktop & Mobile Apps
We know a custom brand doesn’t guarantee an easy product launch, which is why we have invested in not only your success with best-in-class collateral and end-user product documentation to ensure you’re meeting the demands of your new business customers.
Cymbus becomes your own full-featured, private label desktop and mobile app
Marketing teams can send prospects to Cymbus.com for clear end-user messaging, data sheets, and more.
Cymbus Help Center
The rich Cymbus Help Center becomes your customers first point of contact for support — rather than your team.