By Itai Sadan, Co-Founder and CEO, Duda
White-label products are the unsung heroes of many industries and play a crucial role for businesses that want to improve offerings to customers. While some businesses may choose a white-label product as a “plug and play” solution to accomplish one task (or group of tasks), a company that thoroughly integrates a white-label product into its operations can realize benefits beyond the function the product was designed to perform.
Any size or type of business can take advantage of white-label solutions. However, each type of business will gain different benefits, and each will face different challenges when integrating one into a business model or work flow. The following are tips and considerations for three types of businesses implementing white-label products: SaaS companies, digital agencies, and small and medium-sized businesses (SMBs).
How SaaS platforms can best leverage white-label solutions
SaaS platforms are built around a primary solution that the company provides to its customers. The question is, why would a SaaS business need to integrate white-label solutions to offer to its customers in the first place? The key reason is because the SaaS company cannot develop every piece of software in-house. It’s far more effective for an engineering team to focus on the core product while complementing its solution by leveraging other vendors to provide software that is outside of their core competency. For example, if a SaaS company wants to collect payments from its customers or offer a professional website design platform, it’s not going to develop those in-house. There are multiple products perfectly suited for that role that can easily be integrated into the business process.
White-label products become integral parts of the entire solution a SaaS company provides to its customers. An added benefit is that the business does not have to create an entirely new department and spend time to build the product itself, which enables it to scale up more quickly. The white-label solution is customized and integrated seamlessly into the SaaS platform’s technology stack. By expanding the number of services it sells to its customers, a SaaS business can increase its revenue per customer, because customers can get everything they need in one place and don’t need to look elsewhere. As customers consume more services from a SaaS platform, it creates a stickier relationship, which increases retention.
What SaaS companies sometimes overlook is the opportunity to not only brand the look and feel of the white-label solution, but to also customize how it is integrated with their core service. Of course, this depends on one main question: Can the white-label solution be adapted to any work flow the company might already have, or does the company have to change its business to integrate with the product? If a white-label provider has taken this into consideration, the SaaS customer will feel like the solution was built just for its company. Where things really become interesting is when a SaaS platform doesn’t just integrate a third-party solution, but when it starts to extend and customize it to make it their own. By integrating a white-label product in interesting ways, a SaaS company can generate new use cases that didn't exist before. It can develop a unique offering that would have been difficult — if not impossible — to achieve itself.
The primary thing that keeps SaaS companies from using white-label solutions is the notion that everything can be built in-house. For complex software that’s outside of a SaaS company’s core, there is a big risk that the company will not be able to provide sufficient resources to develop it, with the end result being a weak product that is not competitive in the market. In cases where a business later discovers it should have gone with a white-label solution in the first place, the company will have already lost valuable time and spent lots of money in vain.
Agencies use white-label solutions differently
For agencies that provide services to multiple clients — such as a marketing agency or a design agency — some of the benefits of a white-label solution are similar to those for SaaS businesses. The ability for an agency to put its own branding on a white-label solution is important, but there’s an even greater benefit beyond that. Many times, software vendors post pricing and other information that the agency doesn't want its customer to know, because the agency might charge a substantial margin on top of the vendor’s fees. Agencies that use software with third-party branding often find themselves needing to defend these markups. By using a white-label product, agencies can avoid that discussion.
A small agency can even find several white-label partners and become a one-stop-shop for its own clients, competing with larger agencies by offering a whole suite of interrelated products and services without having to hire a slew of staff to create and support all those things.
Sometimes, an agency’s client will have a particular product in mind — perhaps because it’s a big name that’s widely known — while the agency has a preferred white-label product it uses. When this happens, the agency should explain to the client the benefits of using the white-label solution and how it would better serve their needs. To understand the benefits of the agency’s preferred software, clients may need some coaching on this issue. They may need to see a proof-of-concept, or hear from other customers who are successfully using the white-label solution.
White-label products provide opportunities for SMBs
White-label products offer SMBs the opportunity to be competitive at a higher level in an industry. As with agencies and SaaS companies, SMBs can use self-branded white-label products to quickly expand services for clients without adding a lot of staff. SMBs can even build an entire business around being a reseller or partner for a white-label solution.
Alternatively, these products can be used to help an SMB operate more efficiently and streamline internal processes with a lean workforce. For example, a small business might use a piece of white-label accounting software to handle invoicing and payments to suppliers. In this case, the company will want to put its own branding on the accounting software, so that paperwork is easily identified as coming from that particular business and not the white-label solution’s creator. Products like these can help a business enter the marketplace and get up to speed faster, since there’s no need to invent all these processes from scratch.
Find a solution designed to fit the way your business works
Finally, businesses need to remember that branding is just one part of customizing a white-label solution. The ones that drive the most business value will be adaptable for integration into a company’s work flow. A business should never have to change the way it works just to integrate a white-label solution into its stack or processes.
Because there are many issues to consider when selecting a white-label product, as well as many levels of potential integration — each with its own level of value — it can take a little time to choose the one that offers the maximum value for a particular type of business. Companies should talk to references in similar industries and ask about experiences. It’s also especially important to ask, “How is their customer support? Were they there for you when you needed them? Did their expertise go beyond what you could’ve found with your own research?” Try a proof-of-concept for a few months to see how a particular tool would work out.
The integration of a white-label product into a company’s platform can open up new opportunities not only for the way the company serves its customers, but also potentially new streams of revenue. A business needs to look beyond the white-label solution as a mere plug-and-play product to understand the full scope of its potential when integrated. Those who do will reap the rewards of innovation — increased revenue, satisfied customers, and streamlined operations.
About Itai
Itai Sadan is the CEO and Co-Founder of Duda, a professional website builder for agencies and SaaS platforms. Under Itai's leadership, Duda rapidly expanded its professional website builder product suite with an emphasis on empowering web professionals with cutting-edge tools to help them create beautiful conversion-driving websites at scale. To date, Duda hosts more than 870,000 active websites that have been built by over 17 thousand customers globally.
Itai's expertise in the online presence and web design space has been cited by USA Today, Forbes, Inc., HuffPost, Search Engine Land, and more. He is a regular speaker at industry events hosted by such organizations as BIA Kelsey, Constant Contact, Local Search Association, CloudFest, and SIINDA. Itai has a BSc in Computer Science and Mathematics from the University of Ben Gurion in Israel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.