What is a white label solution?

We live in an age where technology is playing an increasingly popular role in our lives. From day to day activities such as communicating with friends and family, to completing the weekly shop, technology is making our lives easier and giving us the flexibility to form our own routine.

However, technology has also opened up many new possibilities for entrepreneurs looking to create long term businesses within the digital space. In our blog this week, we wanted to pay particular attention to the idea of a white label solution and discuss some of the associated advantages and disadvantages of embarking on this method to create your next business.

White label solutions
A white label solution is a product or service that is produced by one company and that other companies rebrand to make it appear as if they made it. Another way to think of a white label solution is you are renting software from the owner and passing it off as your own.

Over the last few years, white label solutions have grown in popularity as businesses are reluctant to invest in developing their own technology and infrastructure. This has created a need for specialist companies to develop technology platforms that can easily be rebranded and presented to the end client under a variety of brand identities.

How much does white labelling cost?
This is a tricky question to answer as it depends on a number of factors. For example, each company that invests and creates its own technology will have a figure in mind when offering a white label solution to its clients. Essentially, the white label provider is forgoing all branding and association with their product, from a client perspective, and therefore will charge a premium for this.

As a general rule of thumb, when investigating white label solutions you will be paying a fixed upfront cost to have your branding displayed on the technology and then you can expect to pay a monthly fee back to the original owner for as long as you are utilising the software.

Why do companies white label?
Two of the most popular reasons why companies decide to find a white label provider as opposed to creating their own software is due to the cost and risk of owning your own intellectual property. Developing your own bespoke software is an expensive process - we know this first hand having developed our own technology platforms here at iOB Business. It takes a lot of planning, coding, time and labour hours to create a release-ready product. This deters many businesses that are looking to launch quickly and can’t invest the resources required to build their own solutions.

It is also a calculated risk when developing your own software as technology moves at a very quick pace. This makes the job of maintenance and new product developments difficult for many businesses. Thankfully, here at iOB Business, we have a dedicated team of developers and IT specialists that solely focus on creating the best user experience with our technology platforms.

The advantages of white labelling
There are a number of advantages of white labelling technology platforms that make it an attractive proposition for new businesses just starting out. For example, as mentioned earlier, it is relatively inexpensive to white label when compared to creating your own technology.

Secondly, you can mitigate your risk by not having to maintain the technology as it is owned by a third party. This allows you to limit your exposure and pass on the responsibility of innovating the technology to the actual owner.

The final advantage of white labelling software is the fact that it significantly reduces the time it takes you to go to market. If you were to develop your own technology, you are investing time creating your own intellectual property. In contrast, a white label solution allows you to ‘piggyback’ off someone else’s technology and enter the market quicker with a ready-made product or service.

The disadvantages of white labelling
While we have discussed some of the advantages to white labelling technology, there are also a number of drawbacks to rebranding someone else’s technology and passing it off as your own.

Firstly, a white label solution does not give you control as you do not own the underlying source code or software. This is a concern for many business owners as you can not make changes that are requested by your clients which is frustrating for all parties concerned. At iOB Business, we made the conscious decision a few years ago to develop our own technology so we could better respond to feedback from our Partners and their clients. Operating in the technology industry, we believe it is crucial to control our software so we can adapt to changes in the market place.

The second disadvantage centres around brand credibility. If you are white labelling software from a third party, it is very likely that your competitors are also using the same provider. This makes it difficult to differentiate yourself from your competitors and really stand out in a crowded environment.

The final disadvantage of white labelling is around transparency. When most companies white label, they do not disclose this fact to their end clients and instead position themselves as the creators/owners of the software. This can prove to be risky as you secure more clients and then don’t have the mechanisms in place to modify the software.

Summary
As we have seen throughout this blog, there are a number of considerations to factor in when you are considering whether to white label a solution or not. In our opinion, we truly believe it is better to create your own technology rather than use a third-party system.

While there are a number of great white labelling options covering all sorts of platforms and technologies, ultimately when you start a business, you want the control to scale up on your terms. Using white labelling long term is risky as you are very much reliant on the software originator to modify, improve and evolve the technology you and your clients are using.

To find out more about our technology platforms and how we can help you launch a Digital Agency, please contact a member of our team today.

Until next time, take care.