The decision to white label products is one most manufacturers have to make at some point in building partnerships with online retailers. Depending on your brand, it might be part of your overall ecommerce strategy or one you consider with individual retail partners.
White labeling your home furnishings products can give your brand an edge—or it can take its edge away. To decide what path is best, you need to think about your brand’s growth goals.
What Brands Should Know About White Labeling
First, to make sure we’re all on the same page: White labeling is when a retailer is given permission to sell an otherwise branded product from a manufacturer under their own brand name or a house brand name. That includes giving the item a new product name and UPC.
Of course, that approach comes with implications that brands need to be sure to consider, including:
Pricing. Because those products are technically no longer associated with your brand (in the eyes of the consumer), white labeling can make your MAP policy inapplicable. The specifics of any agreement you have with a retailer should detail those specifics, and manufacturers can sometimes negotiate the terms to ensure their white-labeled products aren’t sold at a price that would undercut branded products. Any agreement must be clear and understood on both sides to make sure manufacturer and retailer needs are met.
Same product, different sites. It’s possible to white label your product on some retailers and not others—but you have to be cautious if you choose this route.
“With different tools and Google Image search, it’s getting easier and easier to find the same product on different websites,” said Erin Hanley, BrandJump Associate Brand Manager. “You have to really strategize how they are named and what SKUs are on different websites.”
This runs the risk of having a customer find your product for $400 on one website and $800 on another, putting trust in both your brand and the retailer in jeopardy.
It’s OK to experiment. The decision to white label your products or not can depend on the partner and your mutual growth goals. It doesn’t have to be an all-or-nothing decision if you want to give it a try with select SKUs and go from there. Again, you’ll want to make sure your agreements are in line with whatever expectations you have to be able to adjust your strategy as needed.
Different Retailer Approaches to White Labeling
While many, if not most, retailers have some sort of white labeling program of their own, their strategies behind them can vary.
Retailers like Wayfair use white labeling to reach customers on style and price rather than brand. Wayfair has a handful of house brands, each with a targeted look and price range. White labeled products can then be sold under the house brand that is the best fit, giving the products a greater chance of reaching the Wayfair shopper who is browsing by the same criteria.
Putting products under the retailer label also lets the retailer circumvent MAP pricing and price items where they see fit for the category or product type. Retailers can also use their own algorithms to price products where they are most likely to convert. For the manufacturer, this can be a way to test out releasing the constraints of their MAP without hurting the brand name.
For some retailers, the white label brand tells a story. They are tastemakers.
Other retailers—for example, Lulu & Georgia—use white labeling as a brand strategy. It allows them to curate an aesthetic that represents their business and speaks to their target customer.
“For these retailers, the overall brand is a story,” said Erin. “They are tastemakers and they’re excellent at sourcing products under a white label to fit into their narrative.”
Style and price are also paramount to fitting into one of these brand’s white label collections. These retailers are typically not after commodity brands, no matter what kind of sales volume potential there might be. What’s key is that the products fit into style and taste that its customers know and love them for.
With either approach, retailers who have an in-house design team may also source products through a white label to test trends with their customer base. That way they can know if a product type or category has staying power before committing their own resources to it.
Is a White-Label Strategy Right for Your Brand?
As with any strategy, there are pros and cons to white labeling your products on a retailer’s website.
One pro is that it can help you reach the customer (like in the Wayfair example above) who is primarily shopping for a product in a style that aligns to their taste and a price point that aligns to their budget. Because retailers’ marketing largely focuses on their owned brands, white labeling products under them gives you a better chance of getting in front of that customer.
On the flip side, opting your products into a white label program can relinquish some control of the merchandising of that product. The retailer can add imagery to make items more cohesive with the rest of the white label line, but the manufacturer won’t have a say in the type or quality of these images. The same can happen with product content, where information is changed, but can end up being incorrect or misleading. So manufacturers should still keep an eye on those products or investigate any increases in product returns or poor reviews that indicate the information on the product page is not meeting customers’ expectations.
There’s also a chance your product can fall out of line with the house label if it changes its strategy (say, if the price point lowers or the style guidelines evolve).
So when does it make sense to consider white labeling in your strategy? There are three things brands should think about:
If you’re a good fit with the retailer. That means your product is in sync with the retailer’s brand in terms of style, price point and quality. This isn’t something you can force if it isn’t there.
“If someone came into a store looking for a formal dress, you aren’t going to bring jeans and a t-shirt to their dressing room,” Erin said. “Even if those jeans and t-shirts are best sellers, it’s not a fit.”
Especially for those retailers like Lulu & Georgia or West Elm, Erin recommends that manufacturers shop the sites themselves to understand how their products align with a retailer’s vision.
If you aren’t focused on building your brand name. If your products aren’t well-recognized in the consumer market by your brand name, you won’t be sacrificing that by selling products under a brand name. But be sure to consider what recognition you have with the trade/B2B customer as well.
If there is brand equity there, it doesn’t mean white labeling is a deal breaker. But you’ll want to consider how and where products are white labeled if you want to retain some of that equity and protect your brand.
If you’re early in your ecommerce strategy and not sure of the right approach. We’ve said many times that experimenting is the best way to figure out what success looks like for your brand’s online strategy. White labeling is no exception. You can try it out with select SKUs and not surrender your entire assortment, then give it time to make a more informed decision.
Whatever path you end up on, let your brand’s objectives (volume, name recognition, revenue) be your compass, with enough flexibility to find the best way there.
“Be flexible. Know what you want to get out of a retailer relationship,” Erin said. “Because the retail partner definitely has an idea of what they want to get out of you.”
