Looking to expand your dropshipping brand even further using product labeling? Our informative guide will help you gain insight into starting your whitelisting venture. Heres what you should know before getting started.
Depending on your dropshipping business goals and mission, whitelisting products could be a great potential to align those achievements. Take Gymshark for example, they started their ecommerce business initially through dropshipping activewear and eventually transitioned their products into Whitelabel items. This is a classic example of the advantage your business can have from branding your drop ship products.
Assuming you already have a stable dropshipping business and want to take your business the extra mile to further expand on, start investing energy and time into your brand’s concept, product design and delivery. Having an already stable business model allows you to focus more on the expansion of your online business model rather than trying to handle the startup, suppliers, websites and more.
So what are white label products?
Whitelabel products are items branded or printed with a text or image typically of your brand’s name. Having a custom product and packaging experience gives customers’ orders a sense of reassurance that what their buying is assured and motive which helps develop security, social acceptance and confidence when purchasing your product. Whitelabel products also help you broaden your ecommerce platform, marketing efforts, the overall concept of your business plan, retail business benefits and so forth.
Here is our benefits list of White labelling products:
Great for building a long term brand
Without a strong consumer base, it is hard to build a long term brand without any branding, although not limited. Whitelisting your dropshipping products can help reach higher stages of societal commerce for word of mouth and recognition awareness which can convert into leads. Having your dropshipping logo or name on your product lets your customers know you have made the effort to conceptualise and invest in your brand, which will (hopefully) return reciprocation. This shows value, delivery and stability to consumers which is great advocacy for new and long-term customers.
Higher socially responsible value
Consumers are more likely to purchase a product with a brands logo or name printed on it over an unbranded, wholesale item, simply for the look and feel of owning a socially accepted product. The feeling that socially responsible products will improve their image and value and feelings of social acceptance is sought after and recognised more than the product itself in some cases.
If your dropshipping product was to sell in stores with no custom labelling, it would seem gimmicky and unsure to consumers, so they would rather invest more into a “well known” product for the security illusion that guarantees the customer, it will work.
Gives customers a sense of reassurance, security and experience when purchasing
Traditional dropshipping products are sold within the product itself meaning they are unbranded, generic and in a wholesale state, therefore, there is no perceived security value. Having your brand on your product means you are creating customer experience and reassurance when buying your product. The feelings associated with your product will cover all 5 stages of a consumer-focused marketing funnel, making a purchase more likely to happen through this action.
Great marketing and social platform aspects
A successful dropshipping store lies in the marketing of your ecommerce store. White label products have such a massive advantage when it comes to advertising your drop shipping product as there are many innovative ways you can go about showcasing your product or brand to your target audience. As a store owner, marketing is where your main source of leads will generate from, so market research the benefits of a branded product is an easy way to start advertising as you’ll have this dominant advantage above your competitors.
Increase your selling price
Investing the delivery into whitelisting your product means higher prices, so, it is only natural to increase your selling price. Dropshipping products alone are very inexpensive to purchase so you can sell your product for low prices and still gain a profitable return on investment. The same goes with Whitelabel products except the numbers are scaled. Investing the effort to enhance your product for consumers will cost you more but profit margins are broadly increased. A branded product socially perceives as more value, along with your brands’ appeal which will reflect your prices. Knowing this you are able to determine your own product value no matter the price and invest more into this area to see change from your target market.
A unique addition to your product
Stand out from the crowd and rank from your competitors. Adding a simple logo to a dropshipping product creates an Identity that makes you different from the market at large. Your product is more likely to be purchased over other dropshipping businesses as it is going to socially appeal more to consumers over wholesale plead items. This unique addition of white labelled products is a small but effective move for both consumers and business owners as it benefits both parties in their own way.
Faster shipping times
By complying with a dropshipping supplier to source products, you are both exchanging value. Investing more money into white labeling your dropshipping product means the supplier is most likely to prioritise your store over the many other drop shippers who are not. This can look different with different suppliers but usually shows through the fast shipping times. We all know that e-packet shipping can take months for a customer to receive, so saving yourself from the havoc this creates with faster shipping is great for you and your ecommerce businesses overall. Faster shipping times is such a great advantage for advocacy and favour to customers as it can truly make them want to buy more- customer service is positive, generates positive reviews, great word of mouth and makes customer support easier the list goes on this will all set you apart from the other dropshipping competition.
Disadvantages of dropshipping Whitelabel products
Although there are multiple advantages that outweigh the disadvantages of dropshipping Whitelabel products, so what actually is the catch? See below for the cons of dropshipping Whitelabel products:
The need for fulfilment centre to produce and hold your products
Because most dropshipping suppliers require you to buy your Whitelabel products in the MOQ demand, you have to A) buy in bulk, and B) store your products in the manufacturer warehouse space. Because Whitelabel products are made according to your manufacture product order which is in the quantity of the MOQ, you must keep the products somewhere, therefore you will also need to manage stock levels and track inventory. Usually, every time a dropshipping order is placed, the products are made and shipped accordingly, so you do not need to worry about stock and inventory as it is abundant with the supplier, but dropshipping Whitelabel products is a little different. This leads us to our next point.
Self manage stock levels and track inventory
Because your products are only accessible to you, the products are manufactured based on your order quantity, therefore you will need to manage the stock levels of your product and track your own inventory. This is done to ensure you don’t oversell your product if you have sold out and there are no white label products available. Managing your inventory is normally nothing to worry about when dropshipping as that is already handled by the supplier themselves, so a process for this will need to be considered.
Upfront costs can be costly
Whitelabel products require you to buy according to the drop ship supplier MOQ (Minimum order quantity) which is anywhere from 1,000 to 5,000+ pieces minimum. These numbers can vary largely depending on the product supplier, so upfront costs are expensive especially if you are just starting out. It is recommended that you already have a successful business profiting to ensure you’ll return on your investment rather than lose money testing the waters.
Risky if starting out
It is recommended that you already have a successful dropshipping business profiting and are confident that your product and brand will continue to uphold its value as whitelisting is a costly decision to make. Rather than testing the waters, you must be sure that your product will sell, along with a decent amount of online sales prior to ensure you’ll profit on your investment rather than lose money.
This product development investment is not a clear cut decision, so it is a good idea to look into your business goals and needs to determine if white label products are suitable for you and your business. Our guide will give you the pros and cons, insight into whitelabeling products and what to consider if you are looking to venture out into this field. Hope this helps you choose wisely.
All the best from OPMC 🙂