Spot the Difference: White Label Desserts vs. Private Label Desserts
Did you know that “white labeling” and “private labeling” are not the same thing? Although the terms are often used interchangeably by brokers, manufacturers, and even retail stores, they actually have two different definitions. Another common misconception is that the one difference they have is concerning what is being sold. For instance, some individuals suggest that white labeling is used for services, and private labeling is used for products. However, this assumption is not correct either.
Many professionals get so easily confused by these terms because the distinctions between them are very subtle. Both terms refer to rebranding products or services for a retailer’s brand, and both are incredibly lucrative eCommerce strategies. However, there is a key difference. One method involves products being manufactured exclusively for one retailer, and in the other approach, products are manufactured for multiple retailers. To ensure you understand which one is which, we’ll clarify the difference between the two below. For your organization to decide what’s best for them, it’ll help you know the difference between white-label desserts and private-label desserts.
What is white labeling?
When a product, like a dessert, is white labeled, it means that a manufacturer will create it and then sell it to multiple retailers. Each retailer can then resell the generic product under their brand and offer a new product to their audience without spending time and money developing it themselves.
White labeling desserts offers many advantages to retailers. One major benefit is taking advantage of the manufacturer’s expertise. The manufacturer has already used their time and resources to create a well-polished dessert, so all a retailer has to do is put their name on the package. A disadvantage to white-labeling desserts, or any other product, is that retailers have little to no room for customization. Therefore, if a retailer doesn’t like an ingredient in the dessert, they wouldn’t be able to remove it. The manufacturer ultimately decides what ingredients they use and how they package it.
An example of white labeling is if you, as a retailer (example: Betty Sue’s Baked Goods), decide that you want to sell gourmet cakes to your customers as a way to expand your brand. However, you don’t currently have a recipe and don’t want to offer a potentially subpar dessert to your loyal customer base. In addition, you don’t have the ability to mass-produce. You decide to work with a manufacturer who can make the cake, package it, and then add your label, Betty Sue’s Baked Goods.
What is private labeling?
Private labeling is when a dessert or another product is sourced from a manufacturer and sold under a retailer’s brand for exclusive sale. With this approach, retailers can customize everything about the product, such as which ingredients are used and how it’s packaged. Private labeling allows retailers to use their own recipes, which gives them the brand recognition they desire. Retailers only hire and pay a third-party manufacturer to produce and deliver the dessert. The downside to private labeling is that it could take longer to market and is often more expensive than white labeling.
An example of private labeling is if you have a family recipe for cupcakes but can’t produce everything on a larger scale in-house. You then contact a manufacturer who can mass-produce the cupcakes using your exact ingredients and packaging.
Main commonalities between white and private labeling:
As mentioned earlier, people confuse white labeling with private labeling because they’re very similar. For instance, both models use third-party manufacturers to produce their desserts and then resell them with their custom branding. In addition, retailers using either approach have complete control over their advertising strategy and marketing process. Whether you choose private or white labeling, the manufacturer has no trademarks over the produced products once the deal is solidified. So in both situations, a retailer’s consumers won’t realize that another company created the desserts they purchased.
Main differences between white and private labeling
While there are many commonalities, there are also some differences between white and private labeling. For instance, white labeling allows retailers wider distribution for their product lines so they can reach more customers. Because customers purchase an exclusive product, private-labeled products tend to be a bit more expensive than white-labeled ones. However, although more expensive, retailers who sell private-label desserts may see a higher return on their investment because there is less competition.
Another thing to consider is that white-labeled desserts typically sell faster than private-labeled ones because customers tend to trust larger retail brands. In addition, retailers selling white-label products may need to be more creative with their advertising since other retailers will be selling the same generic product.
Which label is better for your brand?
So, which label should your brand go with? You should white-label your desserts if you desire a proven product that’s already developed and manufactured. If you’re looking for the easiest, most cost-effective approach that you can implement within a few months, white labeling is the best choice for you.
If you already have a recipe and established niche and want to keep your brand distinctive, private labeling is the best option. Retailers can sell an exclusive product to a well-defined audience. Plus, with lower competition, higher profit margins may be possible.
Steven Charles can serve your brand
We understand that consumers are looking for a high-quality gourmet dessert they can indulge in confidently. As a result, Steven Charles offers white-label and private-label dessert options for sophisticated gourmet brands that desire a product that reflects their style and high standards. We have over 25 years of enhancing retailers’ dessert offerings and would be glad to serve you as well.
Get in touch today to begin creating your iconic dessert. Whatever your choice is, Steven Charles is here for you.