If you have been searching for information on white label services, most likely what you have turned up so far is advice on whether you should sell white label services. But what if your question is whether your business should buy white label services and resell them under your brand? They seem like two sides of the same coin, but the relevant points are quite different.
Our company is named The White Label Agency, so it’s kind of a no brainer that we think buying our WordPress services on a white label basis can be a great addition to your bottom line (and ours). But we’re not convinced it’s the only way to go. In fact, we have numerous partners that choose to share with their customers that we do their website development.
If you’re considering a white label subcontractor, should you take the white label option or should you be open with your customers about who you are sourcing to? In this post we walk through the reasons for and against taking the white label route when you are outsourcing work like web development.
What does white label mean?
The “White Labeling” or private labeling technique came to the software development world from real world goods production. When you are the buyer of white label work, it means putting your company’s name on something that others have made, instead of acknowledging that another company made it and you are selling it.
Want the legal definition? To give you a taste, here’s an excerpt from our standard NDA agreement when our partners choose to hire our WordPress developers on a white-label basis:
TWLA agrees to not disclose to any other person (unless required by law) or use for personal gain any Confidential Information at any time during or after its collaboration hereunder with Agency, without Agency’s express written consent.
This setup can bring up both legal and ethical questions — but we’ll leave those for the thinkers and focus on getting things done instead. The more pressing question is whether white label development will make your agency more profitable or not.
Reasons to White Label WordPress Development
01 Land customers who are looking for more
Your agency exists for a reason. You and your staff have a certain set of skills that add key value for your customers: your core competency. But it might be the case that your customers often ask if you can provide additional services alongside your core offering. For example, you might be excellent at web marketing, but your customer is looking for someone who can build the website as well as design the marketing strategy.
When you white label WordPress development, you don’t have to develop that website from scratch. All the resources, developers and technology already provided by the white label agency (or The White Label Agency). From your customer’s perspective, they’ve found someone who offers exactly what they want — and you don’t have to waste time learning new skills or restructuring your business to give it to them.
Naturally, we’re not suggesting every time a customer asks for something you don’t normally offer that you go looking for a white label provider to do it. A white label setup will only be profitable if you find many if not mostcustomers are typically looking to combine your services with additional services that you can buy white label.
02 Maintain your cohesive branding
Your agency’s customers have already chosen to trust you — so it’s often smoothest to keep your company’s brand on the work when you give development to a white label company. Your customers may have already worked with you and known you for some time. That’s why their perception of what they receive may be better if you keep it under your agency name than if they find out someone new is involved.
This is especially true if you’re focused on a local market while outsourcing internationally. Roger, one of the members of a full-service marketing agency that has partnered with TWLA in recent months on a white-label basis, has experienced this first-hand. With a few customers, they tried explaining the subcontracting setup upfront, but as soon as customers heard that the development was being outsourced to Ukraine they grew skeptical and dropped off. For such customers, they may feel that they chose a local agency in order to avoid the uncertainties of international collaborations.
Since Roger’s clients have been happy with the quality and speed of the work itself, he and his agency partners have decided the white label approach is simpler. “We already have to convince the client to do business with us,” Roger explained to me. “We don’t lie, we just don’t tell it initially. If we’re in a project, the client knows I’m not the builder,” though he is the one that typically discusses the coding of the project. And so if it comes up as a direct question during the process, he will explain the partnership with TWLA.
If your customers are looking for the particular qualities that your brand offers, it may simply make more sense to keep the white label work under the umbrella of your brand. The key then is to find a white label partner that lives up to your quality standards.
03 Focus energy on sales
The previous two points implicitly assume that you are considering white labelling a service that you are not set up or capable to do. It might actually be the case that you yourself have the skills for it — maybe you have been doing it yourself until recently — but you have realized you can increase your profits by focusing more on sales and letting someone else do the production. Or you may want to occasionally expand capacity for a service you already do, so as not to miss out on a sale. In this case, you might want to white label to maintain your image as a provider of that service.
04 Uphold your margins
In some types of white label markets, your white label provider would be just as happy to have customers as your own agency. A proper white label NDA can keep your customers from running off to nab the lower prices that you are getting as the middleman.
This shouldn’t be your only reason to go white label, though. In any case, it’s usually better to work with a white label partner whose business model is built on only having customers like your agency. For example, at TWLA our business is structured to build partnerships with agencies that give us recurring projects. We have no interest in a one-off customer, like the clients of our agency partners. Thus, we have no risk of competing.
Reasons to Skip the White Label Feature
01 Display transparency
If you think that your end-customers are more open-minded and the subcontracting agency can do good work, then it can be pretty easy to say that this part of the work was outsourced and not done by you.
This might be tricky if you are considering transitioning into white label subcontracting of services like web development and design, and you already have long-term customers. If they trust you based on your work, they might see this kind of change as negative.
On the other hand, if most of your revenue comes from new customers, it could be a benefit to emphasize how transparent you are in your dealings with them by explaining what you outsource upfront.
02 Keep stakeholders accountable for the quality
If you have been outsourcing web development on a white label basis, and your subcontractor suddenly starts having issues and delivering lower quality, your customer will think that you are the source of the problems. Even if you switch to a new outsourcing partner, it may be hard to reassure your customer that things will get better. If you are open about what you subcontract, you could simply explain that you are switching suppliers to ensure you–and they–get better results.
Of course, the hope is to choose a white label partner from the beginning that consistently delivers high quality work over a long period of time (incidentally, that’s our mission). But this is a possible risk to consider when you choose whether to work on a white label basis or not.
03 Emphasize expertise
One way to frame your work with customers is to emphasize the value of expertise. If they ask you for additional services beyond your expertise, you can be ready to share that you have a reliable subcontractor that has deep knowledge in that particular area. This might give your client the impression that they have not one partner, but two knowledgeable ones.
Mike, leading our partner 2manydots, puts it this way: “I have a strong belief that every company should do what they do best and hire other people to do the things they’re good at. In this way we let the experts work while we have time to do the things we’re good at!”
Developing a WordPress website with the help of outsourced company and putting your name on it is definitively an option that can bring you more customers, by letting you close more deals while focusing on what you are good at. At the same time, you might actually establish more trust by being open about your subcontracting relationships and showing that you have a reliable outsourcing partner. Which one suits your agency best depends both most importantly on your brand — what your customers know and trust you for — and the types of customer relationships that matter for your business, such as whether they are typically long-term or just a few transactions.