This is a pitch that I give every month. Actually, it’s not really a pitch, I am answering questions as to why work with our company in that capacity.
Before I jump into the ‘why’ of white labeling another agency’s work, I should address the ‘what.’
In business, the definition of white label is:
White label refers to a product or service that is purchased by a reseller who rebrands the product or service to give the impression that the new owner created it. White label products are often produced via mass production.
So what you’re thinking about doing is taking what one company or individual does well and selling (or reselling) their service with your name on it. Sounds weird, but it’s done every day with content, graphics, web development and more.
What we see is a lot of companies doing it sporadically and when needed, but what they do not do is actually make it a product line and a pillar of their core business.
So let’s go back to my original thought and now outline the ‘why.’ There are actually quite a few positives, but I boiled it down to the main six reasons agencies choose to white label another agency’s work
The learning curve
In the digital space, there are a lot of experts out there. There is a ton of specialties and niches where a person (or group of people) might occupy and stake their knowledge claim. This is a fantastic reason why you would consider white labeling another service.
Inbound content writers, video editors, graphic designers, managed IT, social media management, marketplace research. The list goes on and on. If this is a part of your business on a recurring basis and you are looking to scale and/or keep your overhead low, it makes perfect sense to white label these types of services.
Why spend a ton of time becoming an expert when you can make money reselling their service?
To build an employee base takes time, and money—a no brainer right!? At a certain time in a company or agency’s life, there might be little of both of those, but if you don’t, white labeling is a perfect solution.
We all want to grow and scale a company, but if you do it wisely, the long-term dividends can pay off big time.
Save money on the loaded costs of people with taxes, costs to process payrolls, space in an office, resources and management of them by white labeling the services you don’t excel at in-house.
What makes more sense to you:
- Pay someone to sit in your office and study to learn or,
- Pay for the work completed and the study time is on the outsourced agency
I would suggest the latter. In the digital space there is so much happening, changing and evolving it’s going to be difficult to keep up with the hard costs of software and hardware!
Your white labeled solution should be up to speed on all of those. Save yourself time and money by not having this expense on your P&L.
Many disciplines in the digital marketing space have platforms required for their work.
Let’s take the social media management and social selling space for example:
Everywhere from social listening platforms like Nuvi and Falcon to publishing platforms like Hootsuite, SproutSocial, Edgar and Sendible all cost money.
You will pay about $500 a month for a mid-level solution. Add a few of those services on and it adds up quickly.
Graphic design and such has their whole suite of design platforms like Corel, Serif, and Photoshop. Again, a lot of money (ongoing) that you will have to purchase in-house to have for your designers.
When you invest in a home remodel or some type of construction, you’re paying for the products and for the labor to do it. What you’re not paying for (hopefully) are the hammers, the saws, the screwdrivers, the truck to haul the material and so on.
The tools of the trade are included with the white label digital agency service.
So you’re going to have to report on the activity and performance of the services provided right? Who is going to do that?
Let’s assume that you’re working with a professional firm. The time it takes to put together a report based on activities, posts, performance, strategy and did it works takes a lot of time.
Now I know that almost all platforms have the ability to generate a report, (Nuvi has my favorite report) but it usually doesn’t end there—Who analyzes it, edits and synthesizes it for the client? Well you, if you’re not white labeling your digital marketing needs.
If you structure it right, white labeling is a revenue stream
How about making a few bucks and not really doing much? You can add margin to the white labeled company’s services easily if you do your research.
This might be a no-brainer to most, but to some there is that sense of terror of a white label solution. If they’re good, you won’t have to be involved in the nuts and bolts, and you still get paid!
We have seen these relationships work to great effect, and it makes sense that it can be a good mix for any business.
When you’re looking at a business line and/or opportunity, always do an assessment and weigh all the costs, both tangible and intangible.