When the options are manufacturing or white labeling, neither is better than the other. Fundamentally, it all boils down to an entrepreneur’s skills and where they want to invest their time, energy and money. For example, if the product is proprietary and involves unique or untapped formulation, then manufacture is the only way to stock the shelves. If the entrepreneur is a great digital marketer, then perhaps more time can be spent on marketing while another company provides white label products at a wholesale price.
Both methods of stocking the shelves of a business have their pros and cons, and the final decision will ultimately depend on what kind of a person an entrepreneur wants to be.
The Pros & Cons of White Label Products
For anybody starting a new retail business, white label products offer an easy, streamlined way of stocking the shelves. Manufacture can be costly, especially depending on the kind of product that is being sold. Manufacture is especially involved if you are not an expert in the manufacture of that particular product. Let’s have a look at the natural health industry as an example.
Stocking the shelves of a natural health business with white label products removes the need to go out there and learn how to extract botanicals, how to preserve them and what ingredients to put inside. All of this can be left to the experts while you focus on branding and sales.
Now, of course, this also poses its own dilemmas. For example, if you’re not an expert in the manufacture of natural remedies, it can be very difficult to source a reputable product that meets your expectations as a retailer. The obvious compromise to be made is between quality and cost. While you want to sell a quality product, there will be economic limitations — also depending on what kind of an audience you wish to target.
In any case, using the natural health industry as an example, it is tedious and time consuming to cultivate the plants, perform extractions and then package and label products. This is especially true if people are starting with a lower budget.
|Pros of white label products
|Cons of white label products
|– Removes the need for manufacture
– Creates more time for branding, marketing and sales
– Can present a cheaper start-up cost
– Leaves the hard work to the experts of the field while you focus on business
|– Is more expensive in the long-term
– More time spent shopping for the correct product for your branding
– May be difficult to find a reputable product, depending on your brand
The Pros & Cons of Manufacture
The process of manufacture is generally born out of a dream to manufacture a product rather than open a retail store. However, from time to time, the two are born together. This often happens when a person develops a proprietary technique for manufacturing a product. Let’s stay on the topic of natural health to explore this concept.
If you have developed a proprietary formula for an herbal supplement or natural shampoo, for example, manufacture is the only possible way of bringing that product to the shelf. This is because, if it is proprietary, there is nobody out there making that product already!
Manufacture is also an option when you think you can make a product better than the rest of the market. Let’s say, for example, that you have tried almost every natural hair-loss remedy on the market, none of which were particularly effective. If you develop an idea for the same product that you believe is ultimately better than what’s already available, this is another opportunity for manufacture.
While startup costs for manufacture might be expensive, in the long-term it is ultimately cheaper. The most expensive thing in the world is labor, and it is ultimately what you pay for when you purchase white-label products from another company. Curating the process from beginning to end ultimately gives you more freedom over the product itself and how much every aspect of its manufacture costs.
|Pros of manufacture
|Cons of manufacture
|Ultimate creative liberty over the product itselfFull curation of the product from beginning to end, including the cost of manufacture at every stage in the process of manufactureThe development and copyright of proprietary techniques/formulasCheaper in the long-term
|Expensive start-up costsA lot of time to be spent on the organization of manufacture and the quality of the final productIt’s essentially more work than white-label product purchase
The Final Verdict: Stick to What You’re Good At
Ultimately, the availability of white-label products has made it possible for people with business skills, but not necessarily manufacture skills, to have a retail business of their own. Ultimately, being an entrepreneur requires knowing firstly what you’re good at, and secondly being able to distribute time according to your skills and knowledge.
For those who prefer to knuckle into the marketing, accounting and sales of a business, it is natural to acquire white-label products from another company. This leaves more time for the aspects of business that you might be better at — such as sales or website building. Once upon a time, those with these skills had to work for other people, but the availability of white-label products mean that they can now have their own businesses.
On the other hand, artisans, craftsmen, farmers and chemists may have other skills; namely, manufacture. Perhaps sales isn’t their strong point, but they are great at curating the manufacturing process because of an eye for detail, a proprietary technique or simply a passion for what is being produced. Then, other tasks can be delegated to other people or companies.
There are very few in the world who are good at everything! Choosing between manufacturing and white-label products depends heavily on what your skills are and where there is the most profit to be made for you as a business. Is there more profit for you in sales or in manufacture? It all depends on you!