When thinking about launching CBD products for your brand you have two choices: White label vs Private label. These two terms have their advantages and disadvantages so let’s look at them in detail.
White Label Products
White labeling refers to the process in which you purchase unbranded CBD products from manufacturers and resell these products under your brand. It is an advantageous process for a brand that just starts out or wants to “test” a market. All the manufacturing and formulating has been done and it is now up to you (the brand) to select the product that best fits your needs.
The big disadvantage is that products created for white labeling have little to no customization. The formulas of the products are the very same for every brand that buys them. In other words, the products have no competitive edge in the market. You have to therefore rely on your customer base, your branding, and advertising or aggressive pricing to raise the CBD products above the ordinary.
On the other hand, an advantage of white labeling is that it requires little to no upfront cost. It also allows you to test several products at the same time. If you are not sure how your target market or current customer base would react to a certain delivery mechanism (such as a pain stick) or a flavor, this may be an attractive solution to validate a product or direction.
Private Label Products
As with White labels, Private label products are also manufactured by a third party. However, with private labeling, you can play a much more active role in the manufacturing process as you can give input in the creation of it. Have a flavor that your client base is crazy about? Have an ingredient that you think will work perfectly in combination with a CBD product? Then private labeling can help. You can determine which ingredients the product will have and how the packaging will look.
Private labeling allows you to meet more closely your customer’s needs and create tailor-made products for them. You are therefore offering something unique that allows you to differentiate yourself from the competition. The process, however, is pricier and more time-intensive than white labeling.
Let’s summarize the advantages of private labeling:
- The final product will more accurately reflect your brand image
- You also have more control over the ingredients in the product.
- With a unique product, you can also create brand recognition and stand out from the competition.
Here are some of the disadvantages of private labeling:
- The process is more time-intensive and requires more back and forth between you and the manufacturer.
- It is more expensive as many private label manufacturers require minimum purchase orders or set up fees.
As a result of the above, if you want to successfully utilize private labeling, you need to have a good understanding of what you want to do, how you want to sell, and who you are going to sell to.
Other Factors to Consider
Both options of white labeling and private labeling have their advantages and drawbacks that you should weigh in when deciding on whether to launch a private label or white label CBD product.
If you are not sure about what products you want to launch, how your customers are going to react to CBD products, and/or simply want to quickly explore the market and the potential, then white labeling may be a great solution for you.
If, on the other hand, you have a good understanding of what you want, and you have ingredients or delivery mechanisms in mind that allow you to differentiate and an idea of how to launch those products then private labeling may be right for you.
Ready to start your CBD product journey? Or maybe you are still deciding between White Label vs Private Label? No matter what path you are on, CannGoods is here to help you along the way. Contact us for samples or questions.
