The global CBD industry is growing at a rapid rate and it has created various opportunities for entrepreneurs across the globe to cash in on this trend.
But when a new brand tries to enter this competitive space, it becomes essential for them to understand the depth of manufacturing partnerships required for launching the products.
The two most common viable options are white-label and private-label CBD products. Doing everything on your own can be difficult, you need equipment, skilled staff, access to raw materials, formulations, and a whole lot of capital to support these tasks.
Thankfully, you can outsource all this to third-party manufacturers and better focus your resources on marketing and advertising. But what’s the difference between private label and white label services offered by third-party manufacturers?
Which one is better? Well, that’s exactly what we will explore in this article.
What is White label CBD?
White Labeling offers a simple and cost-effective way for you to enter the competitive CBD market. t. When you choose white-label CBD, you’re opting for ready-made products from a manufacturer and putting your brand name on them.
It’s like buying a generic t-shirt and adding your logo to it.
In fact, large and reputed manufacturers like Arvanna will handle the logo & package designing part as well, all you need to do is give them your preferred color and design scheme.
These white-label goods come with a pre-developed standard formulation which is already tested and approved by manufacturers.
No need to make any modifications, these products are ready to be shipped. For example, a white-label manufacturer might offer a basic CBD oil in several standard concentrations like 500mg, 1000mg, and 2000mg. You simply choose from their existing product line and add your branding.
The main advantage is that a company can sell the same from multiple brands with different names and outer appearance.
So a company that targets different user bases like women, office goers, and athletes using different brand names, can do it through the same white-labeled goods.
But this also means that your competitor might be selling the identical CBD gummy or oil, just with their label on it.
Still, the advantages are many, don’t need to spend time and money on product development, testing, or formulation.
The products are ready to go, which means you can start selling quickly. Most white-label programs also have lower minimum order quantities, making them more accessible for small businesses or those just starting out.
What is Private Label CBD?
Private Label CBD offers you a more customized approach to enter the market. By opting for private labeling manufacturing, you get to work directly with the manufacturer to make products that are unique as per your brand message.
You can try different formulations, flavors, ingredients, textures, combinations, and whatnot.
It’s like o having a clothing manufacturer make shirts specifically designed for your company, using your chosen materials and specifications.
For example, you can modify the CBD oil with higher terpenes and phytonutrient content as compared to what the manufacturer is offering in the white label option.
You have full control over what goes in your product and which kind of unique formulation combo you want to choose.
Just list out your requirements and the manufacturer will prepare a sample for you, which you can greenlit for mass production once you are satisfied with specifications.
The major advantage of private labels is that you get exclusivity benefits. The formulation developed for you belongs to your brand alone. No other company can sell the exact same product.
This gives you a stronger market position and better control over your brand identity. You can also basically customize everything from the texture and taste of the product to its packaging and presentation.
Of course, it requires more initial investment and time, but at the same time, it makes your offerings truly distinctive in a saturated CBD market.
So what’s the major difference between both?
So before you splurge your resources, kindly consider the following factors when consulting for private or whistle-label goods with a contract manufacturer.
- Cost Considerations: White-label products generally require less initial investment because you’re buying pre-made formulations. You might spend anywhere between $2,000-5,000 for your first order. Private label, however, often requires $10,000 or more to start because you’re paying for unique formulation development and larger minimum order quantities.
- Control & Customization: With white-label CBD, you’re limited to the manufacturer’s existing formulas and might only be able to customize the label and packaging. The private label gives you much more control, you can adjust CBD concentrations, add specific ingredients, and create unique formulations. You also have more control over packaging design and materials.
- Market Penetration Time: White-label products can be launched within a few weeks since they’re already ready to go. You just need to add your branding. Private-label products may take several months to develop, test, and produce. This includes time for formulation development, stability testing, and packaging design.
Private Label vs White Label: What to choose?
The white label works well for businesses with a focus on quick market entry and lower prices. It’s ideal if you’re testing the market or working with limited capital. The private label makes more sense if you’re building a premium brand or targeting specific customer needs.
It allows you to stand out in the market and command better pricing. At the same time, it requires more resources and commitment to brand building.
Consider your growth plans too. White labels can help you scale quickly with existing products, but you might face more competition.
The private label takes longer to scale but gives you more control over your brand’s growth and market position.
The Final Thoughts
To sum it up, both methods have their pros and cons.
The white label provides simplicity, faster entry, basic pricing, and less capital. Whereas private label allows you to be exclusive, build a premium image, and command better pricing.
So choose wisely, discuss everything with your finance team,m and then choose one that works best for you. Go with a trusted manufacturer like Arvanna to avoid any hassle and commitment to quality.
