What is White Label?
First, perhaps we should ask ~ What does White Label mean?
White Label is a name that comes from the image of an unmarked white label being placed on a product that a purchaser or reseller can then mark with their own name and brand, imagine a white label stuck on a bottle with no markings or writing on it at all. So, white label products and services are those which are offered without any makers, providers or perhaps even product labeling. Such white label products and services are subsequently available for other persons or organisations to add their own labelling and own branding to. The Wiki article on the term ‘White Label’ goes further to record the history of the expression as having originated to the use of white labeled vinyl records by Disc Jockeys.
Examples of white labeling
Supermarkets offer a fantastic example of white label products. White Labeling has been a popular form of supply and marketing for many years now, with supermarkets being a prime example of its success. Popular producers and providers offer their products and services with no labeling or branding to supermarkets who slap on their own labels and branding on making the popular supermarket brands that we see so much of today. The white labeling concept is further enhanced by the complete omission of the original makers identification, you wont see exactly who provided or manufactured the original product, instead it is adorned with the supermarket’s own branding imagery, logos and text. In fact, finding out who is the original producer or manufacturer can be quite a task in itself and not something that most shoppers would even contemplate for more than a moment. There are of-course some fairly reasonable assumptions that can be made concerning the original producer given the similarity between popular branded products and the supermarkets’ own brands. However, there are specialist food producers who make specifically white label products for resell with own branding, professional white labelling outfits.
Also, in the supermarket environment, the own branded products tend to be of a lower cost although they hold no guarantee that they are of the same ingredient or content of branded products. Given that the major supermarkets have immense bargaining power due to the large volumes at which they can buy, together with the facilities of professional white label producers to not only make the product but to go some steps further in offering production and application of branding for the supermarket. So the supermarkets wont actually buy the product with no labelling or branding, but the supply contract would usually involve the product being supplied with the supermarkets’ own labels and branding, etc. This brings the supermarket to only having to bear an initial purchase cost and consequent distribution from one or more central storage depots to the supermarket branches. Low cost on infrastructure and subsequently very low overheads.
Why white label is good
From the suppliers’ point of view the good thing about white labeling is that the reseller can offer a wider range of products and services to their clients without the extended cost of infrastructure involved in creating or manufacturing and distributing those products and services (consider the own-brand products that you see as you enter your local supermarket chain – from Banking/Credit card services, Insurance to food products). From the buyers’ point of view, they have a lower purchase cost to opt for or perhaps a product that integrates with their regular shopping routine and probably offers rewards for using or buying that own brand product.
It should never be overlooked that the supermarket giants having enjoyed such success with their own brand products in some cases may have taken the opportunity to maximise their profits further by investing in the infrastructure themselves to produce their own products. And this is the real success of white labelling – its a spring-board to really making your own, its a way of moving in that direction, taking the first step to becoming a producer yourself when your product becomes so popular with the purchaser and end users that you can use the accumulated profit to invest in being able to make your own and enjoy further growth in profits, and even to go further and produce product variants with that infrastructure.
White labeling has become such a successful venture for so many companies that the business of producing white label products and services is a highly lucrative venture in itself, so at many times those who ventured into buying white label products can easily come to produce white label products, moving from buyer to producer and supplier.
White Label Web Hosting
White Label Web Hosting follows this method and offers unbranded web hosting services and products to anyone who wants to start up and operate their own web hosting business whilst their customers will be unaware that the products and services are provided by another existing and established web hosting company.
A look at the infrastructure and components of providing web hosting to end users can give an idea on why using a white label reseller service is a good idea. For a start, you will need a dedicated computer to host web sites (a Web Server), that needs to be plugged into a suitable structure (a Data Center) which then plugs into the Internet to connect with the rest of the world (Network providers and Data Carriers), the web server needs to have suitable software installed (such as web server software – Apache, operating systems (such as CentOS, Red Hat, etc), firewall and security software and user interface software (such as cPanel). The costs grow and grow and run into thousands, so when you have an established web hosting provider with all this in place, you can over-ride the cost of this yourself by renting their services in an unbranded encapsulation which allows you to offer web hosting to end users with your own name and branding.
Is it really white label though?
There are many web hosting providers who offer reseller web hosting, but whois lookups, trace-routes (tracerts) and reverse DNS lookups, domains and nameservers can quickly reveal who the provider of the service is.
White label web hosting should go as far to the core as can be by returning information which does not reveal the real provider in the results of these lookups and searches. Lookups have to return something, but they do not have to return the identity or brand of the resellers’ provider, in fact at each point they should be able to return the branding or name of the reseller, or an anonymous brand, in order to offer a credible white label product. The best white label reseller web hosting should offer dedicated IP addresses with the facility to have the reseller’s own host name registered against those IPs (custom reverse DNS – rDNS), custom nameservers and the facility to add the resellers’ own logos and branding to end user software (such as the cPanel control panel). In addition an anonymous shared SSL service for control panel logins is also a prerequisite to good quality white label reseller hosting.
Those who do not offer good white label reseller web hosting in this manner leave the reseller open to the possibility that the client will reconsider who they should buy the service from ~ should they use a ‘middle man’?
With white label web hosting it is possible for anyone to run their own web hosting business, while they rent or buy the actual web server space and services from an established provider. They do not have to take on the huge investment in any of the components that make up a web hosting service such as web servers, network connections, data centre staff, server administrators, server support technicians and web server software and system licenses. The cost is therefore kept very low allowing the reseller to make substantial margins on the products they can then brand and sell as their own.
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