Agreement is an agreement between a business providing goods or services to another business" width="800" height="533" />Before you get into a legal business relationship, you must seek and learn deeply about thousands of business concepts, organization structures, supply chains, many types of manufacturing, and various business agreements.
Creating products or services is the most challenging matter for start-up companies because they lack resources and practical experience. Thus, working with a label manufacturing company is a wise choice to solve those problems.
In this article, you will understand everything related to the White Label Agreement – one of the most common types of a label manufacturing agreement. All the valuable information and critical guidance rearranged orderly in this writing will help you master the White Label Agreement.
If you are interested in launching your own white label beverage, Tan Do can help you get started!
Agreement is an agreement between a business providing goods or services to another business" width="800" height="533" />
White label manufacturing is a legal protocol that allows products or services to be sold and rebranded under another company’s brand. Thus, a White Label Agreement is a contract between a business providing goods or services to another business that on-sells the goods or services to the end customer.
It governs the manufacturer’s production process and sets out the terms under which the re-seller may brand the manufactured products. Whether you’re the manufacturer or the re-seller, it is crucial to have this agreement in place to secure your business deals.
For example, a start-up beverage business has limited resources to produce drinks independently, so they use white label beverage products instead. This method brings a practical solution for small businesses because white labeling is in charge of all manufacturing processes, including building formula, product quality control, product packaging, delivering plans, … and other related services based on customer’s needs.
White label products are made by a company (the provider) to be rebranded and re-sold by another company (the re-seller) to an end customer (the buyer). White labeling enables retailers to expand their offerings without producing goods from scratch, allowing them to quickly scale their offerings, costs, and revenue.
For instance, a white-labeled beverage product is manufactured by the provider, rebranded by the reseller and sold to an end customer, the buyer.
In this case, the end-users are the end consumers. White label products can be sold to businesses based on the product and service model of the white label products, suppliers, and distributors.
Similarly, a white-label service is where services like marketing are subcontracted. It’s like getting another agency or production house to do your work or part of the work for payment, but you offer it as your services to your customers. White label services such as marketing automation can help your customers use multiple channels to reach their target audiences and goals.
Typically, it’s a SaaS arrangement, and users go with it and pay every month.
In this case, the end-user is another business. White labeling can be sold to end customers based on the products and services model of the white label services supplier and distributor’s products and services model.
With white label products, the agreement is made between the manufacturer and the re-seller, and the primary terms that are usually included are the following:
Both the manufacturer and re-seller must take into account the following in regards to the White Label Agreement:
With white label services, some of the most widely used services include in a white label agreement are:
By rebranding a vendor’s products as your own, you are reinforcing your branding and reputation. You also build a stronger relationship with your customers.
You can charge the price at which you want to re-sell the vendor’s suggestions.
Because of being in charge of supporting end customers, you can bundle support and control as much as you want for help.
By reselling white-labeled 3rd party products, you can add or reduce different vendors’ offerings and optimize your product line.
As a smaller or a new company, it can be challenging to position yourself as the vendor.
As the go-to resource for your clients, you need to be able to answer all their IT-related questions and issues.
Being in charge of end-customer support typically requires enormous resources.
You need to create documentation like FAQs, marketing and training tools, etc.
In short, the difference is who specifies what the product or service will contain. In a private label relationship, the buyer determines the packaging, ingredients, formula or offerings. While the provider or manufacturer may offer a range of customizations to fit specific needs in a white label relationship, they still specify the design, parts, ingredients, or offerings.
In product:
A private label product is formed by a contract or third-party manufacturer and sold under your brand name. As the buyer, you specify everything related to the product – how to make it, how it’s packaged, what the label looks like. Generally, you pay to have it produced and delivered to your store, although you can sometimes contract to drop shipping. Then you sell the product to other wholesalers or directly to end-consumers.
White label products are produced by a contract or third-party manufacturer and sold under your brand name. As the customer, you only specify the label of the product. In this matter, the manufacturer is already an expert in creating the product you need. They produce the familiar product under other brand names. Therefore, the manufacturer focuses on specific product characteristics and how it’s packaged more than the name you specified that appears on the label.
Choose Private Label when:
Choose White Label When:
After understanding everything about the White Label Agreement above, you must wonder how a white label agreement looks on paper or how to identify and organize a ton of legal terms in a contract. This section will give you a direct answer to these questions. Here is a sample white label agreement template that we have chosen essential terms carefully and reorganize systematically.
