White Label strategies have been used for decades — but is now the time to use it within the context of digital transformation?

Years ago, companies realized that their (expensive) factories were sitting idle whenever there wasn’t enough demand. They reckoned that if they built products in their factories for other companies during downtime, their ROI would skyrocket. In the food industry, this was called “co-packing”.

White labelling in the digital world uses the same concept — improve utilization of sunk-cost assets in order to drive revenue. The primary example is an online store or information website that provides a function — or even an entire experience — that is branded by a downstream customer as their own.

Depending on your business, this may be an option… but is there a downside? Are there factors that make what seems like an easy decision, perhaps a bit more complicated? Consider these six key questions:

1. Support: What will it take to tool up your organization to support your downstream white label partners, vs your usual clients?
2. Marketing: How will you attract enough white label partners to make it worthwhile? And do you have skills in this type of marketing?
3. Technology: Are you able to stretch your current technology to support a white label business, or will you need to build a completely new architecture? And does your IT team have the skills and bandwidth to do it?
4. Legacy Business: How will existing clients, suppliers, and partners view the change, and what will be the impact?
5. Competition: Who are your competitors, both existing and future? And if it came to a war between you and them, do you have the resolve to stick it out.
6. Financial Impact: What will the impact be on margins, and ultimately, how profitable will the white label strategy be?

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