Considering entering into white label manufacturing? Well, there are some steps required to become a white label manufacturer, but it is certainly one of the most lucrative opportunities in the ecommerce market.
Moreover, it offers the ability to expand with the market without the same limitations as selling products on the market yourself. Continue reading below to learn more about white label manufacturing and how you can get started.
What is White Label Manufacturing?
Before going any further, let’s dive into what white label manufacturing means. Essentially, white label means that your business will be manufacturing unbranded or generic products that will then be sold by another distributor.
The distributor will typically be placing their own branding on it to sell as their own. The term white label comes from the idea of a literal “white label” that the purchaser can then put their brand on.
How to Become a White Label Manufacturer
Wondering how to become a white label manufacturer? There are typically two ways to go about starting a white label manufacturing business.
1. Produce Products From Raw Materials
The first of these is to produce all products from raw materials. In other words, your white label business needs to work with suppliers to obtain all the materials that go into making whatever product you are looking to manufacture. These materials are then assembled by your manufacturing plant or in smaller cases, perhaps by an individual.
Depending on the product you are looking to manufacture, this route can require some capital to get off the ground unless you are just looking to convert or add to current manufacturing operations.
2. Purchase Relevant Parts
The second way is by purchasing relevant parts from another manufacturer and assembling them into a unique product. For instance, buying various screws, plastic parts, and more to assemble into a new version of a toy train. Provided the right part supplier is found, this may be an easier route to go rather than having to work with raw materials. However, it can still require a good amount of capital to get production going enough to sell to distributors.
The Benefits of Becoming a White Label Manufacturer
So, what are the benefits of becoming a white label manufacturer over the business just selling the products itself?
Potential for Expansion
One of the most significant benefits of becoming a white label manufacturer is the potential for expansion. Rather than becoming pigeonholed into a specific type of product or industry, a white label products manufacturer can expand with the market.
As new products become available or popular, a white label business can adopt the production facilities to manufacture them. This allows them to diversify and sell to numerous clients who want to sell those products.
Less Market Performance Limitation
Another significant boon of being on the manufacturing side is that the business is less limited by performance in the consumer market. When brands contract your business for manufacturing a product, the business will be paid when the production is complete.
It doesn’t matter how the product ends up performing when it goes to market, as your business has already been compensated for producing it.
Long Term Accounts
Keeping any business running means keeping cash flow coming in. The bright side of white label manufacturing is that contracts with distributors often develop into
What to Consider Before Becoming a White Label Products Manufacturer
Before making the jump into white label manufacturing, there are a few factors to prepare and consider, including the following.
Research Product Demand
The first step is to research the demand for products by consumers and retailers. After all, you don’t want to manufacture a type of product that there’s no demand for. This can be done by evaluating what types of products are popular in the market, what is selling well, and whether the market is too saturated with other manufacturers.
When it comes to choosing a type of product or niche, the opportunities are plenty, as virtually any product can be
Planning: Stock and Materials
The next step is to evaluate what materials will be needed to create the product and how much stock to keep. This will vary depending on your facility’s output abilities and storage space.
Connect with Suppliers
Of course, to obtain said materials, you will need to connect with suppliers. You’ll need to find the right supplier that can provide the materials or parts needed. Additionally, they will need to be at an agreeable rate, which can often be negotiated. Overall, though, don’t be afraid to look at multiple suppliers.
Connect with Distributors
Finally, you will need to connect with distributors who will buy your
Wrapping Up
Becoming a white label manufacturer can be a big undertaking, but it is often well worth it. Your business won’t be limited to selling a certain product or impacted as much when a certain product doesn’t sell. You’ll also be able to build excellent partnerships with distributors that will ensure the longevity and cash flow of your manufacturing business.
Moreover, the proof of success is in the numerous other white label manufacturers that make products for some of the largest brands, including…
- Trove (Clothing): lululemon, Patagonia, and more.
- Kendo Holdings (Cosmetics): Fenty Beauty by Rihanna, Marc Jacobs
- 365 Everyday Value (Grocery and Home): Whole Foods
The above is only a small fraction of the white label manufacturers out there. In fact, many
We hope this guide helps you navigate the world of white label manufacturing and get your own business off the ground.
