White labeling is a powerful and exciting way to generate business and relationships for you and your product. You might feel uneasy about letting another company put its name on a product/service that you thought of, developed, and brought to perfection — but this is about scalable growth and long-term success. This isn’t the end of your relationships with your product; it’s the fruitful beginning.
White Labeling Considerations
It can be a scary proposition to allow a company to utilize your technology or service as their own. The company may use the technology in a completely different way. They might add or modify your service offerings. They may not provide the type of support you think the product deserves. Before you take a step towards white labeling, answer a few questions.
- Have you identified the channel (business to business or business to customer)?
- What is your white label, and to whom?
- Is your product fully configurable in order to adopt the client’s brand?
- Has the client removed all references about the real provider of the product or service?
You must understand that yes, it is your idea, but this is a way to allow your product to actually be used by consumers. Once you have answered these four questions, you can move forward without trepidation.
Avoid the Competition
When starting a white-label agreement you must first identify whom your client is going to be selling to. What demographic or geographical region will the company be targeting? Where will the lines be drawn? What types of other companies can you partner with and still avoid a conflict of interest? The last thing you want to do is compete with your own reseller. You also want to keep the doors open to other opportunities. Be sure that you have a plan and can communicate this to any potential resellers.
Utilizing their Network and Connections
White labeling your product allows you to do what you do best. You are the expert on the technology and features. However, a large brand can take your product, integrate into its own products, and get it to market much quicker. They have the connections with manufacturers, suppliers, and retail outlets. And a brand will spend as much time marketing and advertising the product to the right audience as you did creating it.
While these are all great resources to have, you still need to protect yourself. These larger brands could be looking to simply acquire your technology in order to continue to improve upon it — without you. They also could work to create their own technology to integrate with the product. And some companies will want exclusive rights to your technology, preventing you from marketing the technology to any other resellers. Be clear on what you will and won’t allow.
I Wish I Had Known
There are a few key things that I struggled with when I was younger and first started offering white label products. I hope I can help you avoid a few headaches and frustrations. Here are a few things I wish I’d known:
- Learn to create strong reseller agreements. Understand what these agreements mean and how to protect your technology.
- Study the law on who ultimately owns the technology.
- Avoid giving exclusivity and territories to resellers. This will make it harder to manage later on.
White labeling can be a great way to get your product on the market, build great business relationships, and finally see a return on your investments of time and resources. Giving up the full control over your product may be hard, but once you see your technology powering amazing products, you’ll be proud of the work and investment you made.
Felix Lluberes is founder, CEO and Applications Architect at Position Logic, a leading B2B provider of GPS-tracking solutions, service and support. Felix has over 17 years of experience in the software development industry as an engineer, consultant, developer and manager. Felix is proud of Position Logic’s family culture and his efforts to make Position Logic an awesome place to work. He welcomes anyone to reach out to him on Twitter @FelixLluberesPL.
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Category: Startup Advice