What Is White Label Software?

From Wil Collins:

In an on-going attempt to optimize, businesses continuously search for the keys to success they believe will benefit their circumstances. Although a myriad of these “keys” can be found from various sources, a common understanding is that sales are at the core of every business.

The concept of sales seems simple – there is the product and there is the market, so sell the product to the market. The market can potentially include anyone. However, the product is a limiting factor. How can a product be designed to inherently increase its market size?

What is white label software?

One strategy is to create a white label product that is manufactured by one business and distributed to vendors who market the product to the public under various brands. The product begins with a "white label" and is then branded/labeled by the marketer, thus giving the marketer the opportunity to use a variety of brand identities to sell products to customers in a variety of markets, although the manufacturer actually created the product.

For software companies, white label software is developed by one company to be distributed to other businesses that customize its appearance (not core implementation) and market it as their own software "powered" by the developing company.

This strategy gives the manufacturing company the opportunity to focus on its business rather than diverting resources to a marketing team, and the software development company the opportunity to sell the same product to numerous clients. The presentation of such opportunities epitomizes an optimized environment.  For software companies, "white labeling" may be the the key to success they have been seeking.

Wil Collins is a computer science major at Virginia Tech and an intern with Handshake Media, Incorporated. You're invited to read more from Wil Collins on Handshake 2.0.

First Bank & Trust CompayThis post is sponsored by First Bank & Trust Company, one of the top community banks in the United States, with office locations in southwest Virginia, northeast Tennessee, and the New River and Shenandoah Valleys of Virginia. You're invited to read more from First Bank & Trust Company on Handshake 2.0.

First Bank & Trust Company is a client of Handshake Media, Incorporated, the parent company of Handshake 2.0.

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Comments

  1. Thanks for the comprehensive and easy to understand explanation of White Label products/software. I buy white label products all the time. Clearly, it’s a business model that works.

  2. Although the analogy with generic products found in grocery stores is a loose one (they are more often referred to as “private label products”), I believed it clearly and simply illustrated the main concept. Many companies experience success from this business model due to the increased distribution of the product – SPAMfighter is sold to over 20 million users in 227 countries thanks to their white label strategy.

  3. WordPress is another business that has found success through this white label strategy – “Proudly Powered by WordPress” is found at the bottom of many other businesses’ website.

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