What are the Advantages and Disadvantages of White Label Products?

White label products are products which are manufactured in a central facility and then labeled with a variety of company names. For example, a manufacturer that makes trail mix might make a large batch of trail mix, package it, and then divide the batch into groups which will be labeled “Company A Brand Trail Mix,” “Company B Brand Trail Mix,” and so forth.

The term "white label" is a reference to a practice once widely used by many disc jockeys and aspiring musicians. To conceal the identity of the company that pressed a record, people would peel the old label off and put a generic white label over it.

Many stores use white labeling to build brand loyalty. For example, by using white labeling, grocery stores can create a line of store-branded products, and because white label products are often less expensive, consumers are encouraged to buy them. Therefore, consumers start to get attached to the store's brand, making an active effort to shop at that particular store and to purchase its products when offered a choice between several labels.

For companies that make white label products, the practice has some distinct advantages. These companies can focus on keeping production costs down, rather than on marketing, because these products have a built-in market. Instead of having to seek out stores to carry their products, white label manufacturers can wait for customers to come to them. They can also streamline production by producing huge batches of products.

For consumers, white label products have advantages and disadvantages. One distinct advantage is that these products tend to be much cheaper than name-brand products, and sometimes the quality is comparable. However, the disadvantage is that it is harder to get information about the products and the companies that make them.

Lack of information about a product can be problematic. For example, people with severe nut allergies like to avoid products manufactured in facilities which contain nuts, and this information may or may not be disclosed on a white label product. Other consumers want to practice ethical buying habits, and because the manufacturer of a white label product is often not disclosed, they have no way of telling whether or not the product fits in with their values.

Given the growing number of recalled products, white label or generic products are a growing hot topic for many consumer activists. Because many manufacturers keep the identity of their clients secret so that customers of Company X don't realize that they can get the same thing from Company Y, it may take some time to notify all of the people who have purchased a product about a recall. In cases where white label products go through multiple companies, it may be impossible to inform everyone about a recall. In addition to being potentially dangerous, this can also be frustrating for consumers.