Recently I was talking to an entrepreneur with a B2B SaaS startup and the topic of white labeling his product came up. White labeling is a term to describe making the software brandable by a reseller (e.g. a reseller wants to make the product look like their own product to their clients). When the entrepreneur brought up the idea I immediately said that he should think really hard about it before doing it as there are serious long-term implications.
Here are some considerations when thinking about offering a white labeled product:
- If you want to build a large, standalone brand, white labeling is likely not the way to go, although co-branding works well (e.g. some pieces like the logo and colors of the app are customizable but the URL, documentation, etc refers to the core product name much like salesforce.com does)
- White labeling often works well if resellers are the primary distribution channel as well as having big companies resell it (in this case you’re helping others build their brand and you’re fine with being the behind-the-scenes provider)
- White labeling also works well if you offer an affordable product that goes on a credit card and brand doesn’t play a role (e.g. 37signals and Campaign Monitor have great products that can be white labelled)
In general, most startups that are considering a white labeled version of their product should start with a co-brandable version and see if that meets the market demand as most of the time it does.
What else? What are your thoughts on startups offering a white labeled version of their product?