The private label refers to the business model where the manufacturer markets the unbranded service to the reseller who rebrand the service and market them to the customer. This model is effective, it permits the manufacturer and reseller to avoid the cost of the entire value chain. Private Label Managed IT Services and white label IT services are interchangeable, however, there are differences that people don’t understand. White label and private label are synonymous, there is a subtle difference which is related to the sale of the product. In private labelling, a manufacturer can produce two variants of the same product and sell it to a different retailer without knowing the inception.
The private-label approach provides uniqueness and the capability to customize the product. But it requires greater investment and time to research and requirement of the product, also it requires to sit with the manufacturer to design the product. Those investments and resulted in customization of the product provides high profitability and a large margin. The business model of both depicts the same relationship between the manufacturer and retailer. But it is important to know which model suits your organization.
Key differences between private label IT service and white label services
In Private Label Managed IT Services, the manufacturer defines the defines, parts and offerings. Whereas in white-label, the provider or the manufacturer offers the area of customization to fit in the specific requirement. A private label IT service is manufactured by a third-party and sell under your brand name. It offers you the benefit to control the parts of the services.
Exclusivity: Private Label Managed IT Services work with one specific retailer so that the competitive retailers don’t have similar services, If the reseller chooses to sell it to other private labelled company they mostly like to have specific characteristics, whereas in white-label, there are multiple sellers, which means it would be easier for the new organizations to enter into the market. The uniqueness of the product is dependent on the branding and marketing choice.
Industry Choice: Private label is generally used by small businesses which do not need complexity in production. Private label is mainly popular in the healthcare business. White label on the other hand is within the technology domain only such as IT and marketing. Private label practices are mainly popular in Western Europe; it has a 45% market share as compared to the US.
