The Pros and Cons of a White Label Company

The Pros and Cons of a White Label Company

People are always looking for ways to make a living.  Some choose to find a job as an employee for someone else while others choose the entrepreneurial path.  Choosing to be an entrepreneur is not for everyone and is not always a success.

In the past few decades, one of the easiest way to make money as an entrepreneur has been to resell products and service from another company.  Some example of being a reseller include joining an affiliate program, taking part in pay per head program and starting a white label company.

They are several definitions of a white label company.  In general though, a white label company allows a person to sell a generic product or software without having to spend money on licenses, infrastructure and technology.  Thus, a person can create their own brand or company at a fraction of the cost it would take to start their own company. 

It is a great way to start your own business but everything has a price.  Here are the Pros and Cons of starting a white label company.

Pros of Starting a White Label Company

Cost – The cost starting a white label company are much lower than starting a company from scratch.   On average, you will spend 10% to 50% less on white label company.

You don’t have to come up with a Product – One of the biggest challenges in starting your own company is coming up with a product or service that everyone wants.  By using a white label company, you already have a product that has been proven to sell.

You can spend your time marketing your brand – Since you don’t have to worry about product development; you just have to worry about marketing your brand.  This takes a big load from our shoulder and lets you focus on just one thing.

Resources and Expert Help – The business you are reselling wants you to succeed.  The more money you make, the more money they make. By joining a white label reseller program you get a lot of help and mentoring you would not get if you were starting your own company from scratch.

Simply said, starting a white label company can help you start your own brand of product or service without a large cash investment. 

As in all entrepreneurial concepts, they are risks involved in a white label company that may not appeal to everyone.

Cons of Starting a White Label Company

Whose Product is it?  Even though you are a reselling the product or service using your own brand, it is not truly yours.  Yes, it is cheaper than creating your own company but in a round-about way, you are still working for someone else.  The main difference is that you make your own hours and you take all of the risks.

Not all of the profit is yours - You are still helping someone get rich and are just taking a small amount from the top. 

You are still working for someone else - You are still helping someone get rich and taking a small amount from the top.

Are your clients truly yours?  This does not hold true for every white label company but if it is a service or software oriented white label company, you have no direct relationship with your customers.

Like any business, they are pros and cons and I hope that this information will give you an idea of what you are getting into when you decided to open your own white label company.  Just remember that any business requires a lot of time and effort in order to be succesful no matter what kind of shortcut you may take.

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