White Label vs Private Label: What’s The Difference Between These Two?
Amazon Sellers, Kris and Dustin breakdown the meaning behind White Label and Private Label, how they are different, and how they can benefit different types of sellers.
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– Hey everyone, and welcome to episode 35 of Two Amazon Sellers and a Microphone. I’m Dustin Kane and with me as always is Kris Gramlich, what’s up Kris?
– 35, man we’re just plowing through them. Just keeping it rolling.
– This is fun. I mean, there’s no shortage of topics in the Amazon world.
– Yeah, we could just talk all day about it and probably we’re gonna bring some sellers on and talk to them and get some other software providers on here and talk to them. And yeah, just a bunch of stuff you can cover. So might as well keep doing it.
– When we first started we were very ambitious, we’re telling our teammates we’re gonna do one a day at least Monday through Friday night. Are you sure there’s gonna be enough topics for that? And we think so, and sure enough every day there’s something new happening in the Amazon world. There’s some new people to talk to or just… I mean, the ecosystem is enormous. I mean, you could talk about so many different things. So, it’s fun but today we’re gonna talk about something where you hear these terms thrown around a lot private label and white label. So we’re just gonna spend just a few minutes talking about the difference between white label and private label and how you can use both of those on your Amazon business for sure. So let’s jump right in Chris, why don’t you start with, what is white labeling products?
– Yeah, white labeling is essentially you take an existing product that’s already on the market and you just simply put your logo on it. This is probably what do you say? 99% of products are on Amazon are white-label? The term is not as fancy as private label, but you tend to say white labeling, stuff like I’m white labeling, I’m not creating anything different. I mean, it’s I’m taking a product that’s already out there and I’m adding my logo to it. And then I’m gonna out-market the competition really is what you’re doing. White labeling takes an existing product that you have or that you’ve seen that’s selling well. And you just put your brand on it, plain and simple.
– And that’s also what a lot of people are doing when they say they’re doing private labeling.
– Yeah, for sure. Almost everyone. I mean, it’s the private label business on Amazon FBA but they’re really just white labeling it. They’re just going to a factory in Alibaba, ordering units making no adjustments to it, deciding oh, this is the name of the company I wanna be my brand name. They print a label and slap it on there and send it in that’s white labeling. The best way to describe white labeling is what you see in all the retail stores like Walmart. It’s the great value brand target as their own brand. But if you go to Walmart and get great value, green beans, that’s the same kinda green beans is all the other companies are selling. There is no difference. They’re just putting the great value label on it. Like you said, it’s just a matter of how well you brand that brand. You know, people buy great value cause they trust Walmart and they’ll go there. So that’s what white labeling is. White labeling the ease of entry is really easy. All you have to do is go to a factory, find a factory that’s selling the product that you want and order them.
– Yeah, it’s that simple.
– It really is that simple. Now private label it’s very similar. That’s where they get there’s a little bit of disconnect there and are confused in the terms, but the private label is where you’re going to a factory or a manufacturer. And you have a product idea or you found a product that you wanna improve on in any way possible, whether you’re improving like just like the way it’s packaged or making actual improvements to the product and then creating your whole brand around that as well. That would be private labeling, where you’re making modifications to the product. That encompasses a huge scope whether you’re actually inventing your own product and finding a factory to make it, or whether you’ve got ideas on ways to improve upon a product or change the material or whatever make it tougher, make it softer, anything like that. And then you’re putting your label on it, your brand on it, that’s private labeling. So you’re essentially entering the market with a new product. Something that’s not identical to everything else out there. That’s what actually private labeling means. Both of these methods are very feasible on Amazon. As the competition mounts on Amazon, you can see you have to kind of make the transition more towards the private label to differentiate yourself, unless you find a white label product that’s in a category with low competition. That’s always a nice thing to do, but those are the differences between the two.
– Yeah, and you could start out like white labeling. I mean, that’s what I did a few products and you’ll start to see what customers are leaving your feedback on your products. So as you start to sell that product, you can always like tinker it and add like a feature to it or change the material type and kinda like transitioned to like your own private label like a product that you only have that no one else has. So you can do both of these at the same time. I mean, you could start off smaller with a white label and kind of transition. And then also when you’re doing your product research, we’ve talked about this a few times, but this is where, when you’re doing product research and you find a product that you wanna source it’s always a good idea to go check the reviews. Like you would check the reviews of that product and see what people are saying. See if there’s something that they wished that product had. Or if it’s missing a feature that would be a benefit to it or whatever. You can take that idea that’s already been tested out. And that’s how I was already selling that product. You can just take that similar product and go find a manufacturer and just add that feature to it. And now you just differentiate yourself from that big-time seller. They kind of work to both of your advantages, but you can do both either start out doing white label on your own and just kinda gather reviews and then fix the product or make it better, or just go read the reviews of existing products and then just add a feature to it and go from there.
– Yeah, and I like here you said, you can start off with white labeling. I mean, I’ve said it many times on many episodes in the past that, I’m now looking for less competitive niches, I’m looking to maybe differentiate my product. Yet I’m launching a product right now that’s white labeling. 100% because it’s the best way it’s the easiest way to cost-effectively test that market. And that’s what I think that’s the most important thing about white labeling versus private labeling is if you’re making modifications to a product or you’re looking to do something new, you’re probably looking at tooling charges at a factor more upfront than a tooling charge where they charge you upfront to basically redesign their manufacturing so they can make your product. Whether you mold or whatever. And that can be thousands and thousands of dollars before you’ve even produced a product. And so if you haven’t tested that market out, you might be better off just white labeling a similar product in there test out its ability to sell. Like you said, you can try listing that with reviews and then just add a variation onto it where you’ve got now your more advanced product and you may have funded it through your white label venture. You know, and-
– That’s the way I would go.
– Really and so I think it’s just important to understand the distinction between white label and private label and understand that there’s the differences is basically in the, how fast and cost-effectively can you get a product to market? White label can be as fast as you can ship it from the supplier. Cause all you gonna do is buy it. It’s there, it’s ready, it’s made or they can make it super fast. And then private label there’s a whole lot of setup fees, et cetera to do it. But that could be more of your long-term play for sure. But I’ll keep everybody reported. Like I’ve been telling you Chris about this I’m testing out a white label product right now. So we’ll see how this goes. I feel like I’m there, found a competitive niche. We’ll see.
– I can’t wait to hear this.
– We may make it a case study down the road. We’ll see if it’s a success but to go a full case study. But I mean, that pretty much sums it up. I mean, this is a quick topic but it’s important to understand the difference for sure. Cause you gotta know what approach you’re going. If you’re just gonna find something that’s more generic or if you’re gonna make any adjustments to it and it’ll help you determine your strategy for getting set up and launching. But-
– And the term private label gets used way more like it’s just a generic. I think it’s now being more of a generic term than anything. Nobody wants to say it widely because it just doesn’t sound as smooth. So, I mean, when somebody asks what do you do on Amazon? I mean private label, we’re probably going to have a better idea than if you said I white-label or something. They don’t know what that means. So there is a difference. But at the end of the day, people classify it all the same.
– They’re becoming interchangeable for sure. But in terms of the way you wanna operate you should function and what they are. Well, whether you’re white labeling or private labeling products when you launched them on Amazon no one’s gonna see them unless you start advertising. It doesn’t matter which way you go. You’re gonna have to advertise. And that’s where Chris and I would love to have a conversation with you. We can show you how Sellozo can fully automate your ads on Amazon which if you’ve never run ads on Amazon, there’s so much to it, it’s wild. And it’s getting more and more wild by the day. So, having a tool automate that is as helpful both Chris and I automate our ads on a daily basis we can focus on the other things that we do well like finding products, finding white label, private label products. If you’d like to learn more about Sellozo, you can go to sellozo.com and click the request a demo you’re luck of the draw. Get either Chris or myself on that demo. And then we’ll be more than happy to spend 30 minutes talking with you about anything Amazon, as well as walk you through a demo of the Sellozo platform. We have a fun time doing that. Chris, we talk to sellers every day, we learn something every day. It’s pretty fun.
– It just, there’s sellers need help. And that’s what we kinda do. We just try to help as much as we can. So it’s fun. It’s a learning process and you get to see some cool products.
– Absolutely, well everybody we’ll leave you with that before we go, if you would like if you liked this podcast please subscribe to it on the podcast whatever it’s called device of your choice, subscribe to us. Also, we go live on LinkedIn, Facebook and YouTube. So go to the Sellozo page on any of those platforms and like them as well or subscribed to those as well. And you’ll see our videos when we go live. Everyone have a great day and we’ll be back at this tomorrow, see ya.
– See ya.