China is a great place from where you can import generic goods to sell under your own brand. There are risks, but you can avoid them and make your business foolproof by reading this guide.
You want to start a business selling goods but are struggling to come up with the right product. It’s a dilemma, but not one that should stop you from starting up. You can just take the white label route. It simply means to buy a product that is manufactured by another company, put your brand or label on it, and sell it as your own. White labelling is an easy option for retailers who want to start a business quickly but don’t have a unique product idea or much seed money and are not interested in or equipped to manufacture the goods themselves. White label goods have also gained in popularity in the wake of the e-commerce boom driven by Covid-19. Inquiries from retailers about white label goods surged a massive 75% during the 2020 pandemic lockdown, according to the BCMPA, a UK trade association for contract manufacturing, packing, fulfilment and logistics.
In this piece, we will discuss what white label goods are all about, with a special focus on sourcing them from China. Read on to find out:
- How to find white label manufacturers in China
- What precautions to take when sourcing while label goods from China
What is a white label product?
A white label product is produced by one company (the manufacturer) but sold by another (the retailer) with its own logo and branding. Think American retailer Costco’s signature Kirkland brand of batteries, which are actually made by Duracell.
White label goods are often also called private label goods, though there is a subtle distinction between the two. White label goods are generic products that are sold to multiple retailers, which then resell them under their own brands. For example, the generic anti-inflammatory drug ibuprofen is sold under numerous brand names, most commonly Advil, Motrin and Nurofen. Private label goods, on the other hand, are sold by the manufacturer exclusively to a single retailer. Walmart’s Great Value brand of white bread, which is made by Sara Lee, is an example of a private label product. Another difference between the two is that while private label goods can be customised to some extent, white label goods cannot.
If you’re curious about the term ‘white label’, visualise a blank label on a manufactured product that can be filled with the retailer’s branding. That’s what it means. However, by some accounts, the term has roots in the music industry. In the age of vinyl records, recording companies were in the practice of creating promotional copies of new music and handing them out to radio stations and night clubs to test the response to the music before the actual mass-production began. These promotional copies came in sleeves with white labels on them.
While white label goods can be found in just about any industry, they have found a high degree of popularity in the food and beverages, pharmaceuticals, electronics, cosmetics, personal care and pet supply sectors. Retail giants like Walmart, Tesco, Whole Foods and Target have found success selling branded goods made by third-party manufacturers. And while the term might be white label goods, the services sector also uses white labelling. Department store chain Macy’s offers a store card that is provided by American Express.
White Label Goods Sourcing
If you are looking to source white label products, make sure you have presence on the manufacturing side. Visit the factory yourself or use an experienced sourcing agent to do the work for you. There are huge benefits when it comes to sourcing white label goods. Just make sure you do it right.