What is White Label Dropshipping & How Does it Work in 2021

White label dropshipping or private label dropshipping is the next logical step for dropshippers looking to scale their operation.

But there’s very little clarity on what white label dropshipping is, or how it works. Some dropshippers mix it up with Private Labelling which only adds to the confusion.

In this post, we will explain everything you need to know about While Label Dropshipping.

Let’s dive in.

What is White Label Dropshipping?

White label dropshipping is a dropshipping model where the dropshipper sources a generic product from the marketplace and rebrands it under their own brand name.

For instance, if you have been dropshipping a ‘beach mat’ and it has done really well for you, you will source it from the supplier or manufacturer as usual, but rather than selling it as a generic, you will repackage it under your own brand name.

So ‘Generic Beach Mat’ is now ‘Your Brand Name Beach Mat’, with a custom logo, packaging and so on.

How does White Label Dropshipping Work?

What we just said best explains how white label dropshipping works. You find a dropshipping supplier who can supply your winning product at terms and prices that are favorable for your business.

The supplier can also handle branding and packaging for you. Then, you store the inventory in their warehouse and fulfill the order once you start to generate sales.

It’s almost like dropshipping with an added layer of personalization in the middle. However, there’s one key difference.

When you white label, most suppliers will not handle fulfillment for you. That’s where a reliable dropshipping fulfillment agent comes into the picture.

A dropshipping agent can do both, find a manufacturer who’s able to manufacture your product at favorable terms and prices, manage branding and packaging, and handle the entire order fulfillment.

All you have to do is focus on generating sales and promoting your dropshipping brand.

What Are the Benefits of White Label Dropshipping?

White Label Dropshipping is the step up from a conventional dropshipping operation. It offers some amazing benefits that you do not get in the regular dropshipping model.

1. You have more control

White Label dropshipping gives you more control over the supply chain by keeping inventory in stock. You can use predictive analysis and stock inventory well in advance. In standard dropshipping, you are practically at the mercy of the supplier.

Similarly, right from the logo to the packaging, everything can be customized to your liking and needs. Everything about the product is as per your specifications.

2. You can scale

White label dropshipping allows you scale your operation by creating your own brand. When you sell generic products, you are part of the crowd. But the moment you brand it, you are unique.

Now, you might not be offering an exclusive product. But if you have a quality product, a strong marketing team and put in some efforts towards customer service, there’s no reason why you cannot create a sustainable dropshipping brand around your product.

3. Higher ROI (Return on Investments)

The moment you create a brand, you begin controlling the price. This is one of the biggest advantages of White Label Dropshipping. You see, brands are associated with quality and trust.

You might still be selling the same ‘beach mat’ that you always did, mind you. But with a logo, you have just put a name to the generic. Now if you can back it up with customer service, you can always sell it at a higher price. Customers are willing to loosen their wallets for a premium product. That’s the unabridged truth of sales.

The customer is buying the logo and the branding, not necessarily the mat. You can get rid of competition by selling your product at a slightly higher price. And you will still make better margins because you don’t have to share it with someone else.

4. Longevity

Once you establish a trustworthy dropshipping brand, even with a single product, you can start to offer more products under the same brand name.

For example, you can start selling beach towel and umbrellas with your beach mat. Then you can add more products such as sunglasses and sunscreen over time.

This kind of growth will take time, but it’s worth it when you get there. You build a loyal customer base that remember your products and your brand.

What is the Difference Between Private Label and White Label Dropshipping?

One of the common confusions for new dropshippers is to distinguish between private label and white label dropshipping. Both are similar processes, but there are key differences that separate the two.

Private Label Dropshipping is a business model in which you will create a unique or custom product which you will then sell under your brand name. For instance, you might have envisioned a brilliant product that can solve some of the biggest challenges people face in everyday life.

You think it is a winner. So you find a manufacturer who will develop that product for you, on an exclusivity contract, according to your exact specifications and instructions.

Then, you will brand and package it, before selling it to customers. It’s not a generic product that you source and rebrand. It’s an exclusive that only you offer.

The biggest difference between Private Label dropshipping and White Label Dropshipping is exclusivity. No one else can sell the same product that you Private Label. At least, the same manufacturer cannot offer the same product to other retailers.

But of course, that comes with more challenges. For one, you need to find a manufacturer who can accurately and efficiently produce the item to your specifications. You also need to test and refine it until you can be sure that customers will like it as much as you do.

Secondly, the investments are significant because most manufacturers demand a higher MOQ for exclusive products. These are products that will not be sold to anyone else and they cannot risk being stuck with dead inventory. So, the risk is passed on to you.

That said, if you have a winning product that succeeds, the sky’s the limit. You can make more than you can with White Labelling.

This is where it’s vital to have a reliable sourcing agent on ground. The best sourcing agent will take off a huge chunk of responsibility off your shoulders. They will find a manufacturer, help negotiate the pricing, monitor production, conduct quality checks, manage branding and finally, handle fulfillment.

As a dropshipper, you are only tasked with sales and marketing.

How to White Label Aliexpress Products for Your Dropshipping Business?

Many dropshippers start off by sourcing products from Aliexpress. It’s a proven business model with real success rate.

So, they often ask me, how they can start white labelling from Aliexpress itself?

That’s a legit concern and I understand the logic. You have a winning product and want to rebrand and sell it too, without shifting suppliers.

Here are some possible options that might help.

1. Contact Your AliExpress Seller Directly

Aliexpress & Alibaba dropshipping agent

You can reach out to your current supplier who is currently selling the product on Aliexpress and enquire if they can white label the product for you.

Most suppliers are open to the idea of white labelling for dropshippers. But the MOQ as well as overall pricing may change.

Also, a lot of sellers on AliExpress do not entertain white labelling requests because they are too busy and it’s too time consuming. If your seller refuses to help with white labelling, then you can either search for more sellers who offer the same product.

It’s a bit of a time consuming process though. AliExpress sellers are notorious for poor communication skills. So, it might take a while before you are able to find a reliable vendor, with good credentials who can white label for you.

Some benefits and advantages of White Labeling from Aliexpress

White Labelling from AliExpress offers some benefits. But it also has some drawbacks.

Advantages

  • If the current seller agrees to white label for you, then you can save yourself a lot of time that would have otherwise been wasted trying to source a new seller.
  • You also have the advantage of having a known and respected seller in your supply chain. A good number of customers trust AliExpress based sellers over random dropship suppliers.
  • The seller will handle order fulfillment for you. All you need to do is connect your dropshipping store and most of the remaining part happens on Auto Pilot.
  • There’s a huge variety of products to choose from on AliExpress.

Disadvantages

  • Not all AliExpress sellers can accommodate white labelling requests. Even if they agree, there is no guarantee that the new product will be of the same quality as the original.
  • The pricing might also change depending on whether or not you are willing to pay for branding and packing services. AliExpress dropshippers will often complain about delayed shipments because their supplier does not have enough stock.
  • In cases where the seller has enough inventory, they can still delay shipping by weeks or even months depending on their own personal reasons.
  • There is also no guarantee that your supplier will be reliable and offer you after sales support.
  • There’s a distinct possibility that a competitor will steal the winning product/idea. It’s easier to find an AliExpress seller than finding a private supplier. So just like you, some other smart dropshipper will also reach out to the same supplier and before you know, there are ten sellers selling the same product under different brand names.

2. Work with a Private Supplier or Agent

best-sourcing-agent-in-china

The second option is to source from a private supplier or agent.

AliExpress and other B2B sites are not the sole marketplaces in China. There are thousands of factories that manufacture products in diverse categories, which are sourced by retailers all around the world.

Sourcing agents are like middlemen. They help you find suppliers who can offer the same product at better prices and more favorable terms. They can also handle branding, packaging and order fulfillment for you, which takes guesswork out of the entire operation.

Here are some advantages and disadvantages of this model.

Advantages

  • In all probability, you can get the product at a better price. Not all AliExpress sellers are manufacturers. A lot of them are resellers, which means they buy their product from other wholesalers and offer it on AliExpress. If you are able to find the same product from a sourcing agent or manufacturer, your chances of getting it at a better price increase manifold.
  • A sourcing agent will veto the manufacturer on all fronts before recommending them. You are no longer working with a random stranger on a B2B portal. Instead, you are working with a trustworthy supplier and a partner who will safeguard your best interests. Right from communication to production lead times and quality, everything will be verified at all steps.
  • There’s lesser chances of your competitor sneaking up on you and stealing your winning product. That can still happen mind you since you are not private labelling. But when you source from a private supplier, it’s not as easy to locate them as it is to locate sellers on AliExpress.

Disadvantages

  • You will have to spend a lot more effort trying to find a reliable supplier who can white label your winning product. Finding private suppliers offers its own benefits. But no one said it was easy.
  • The number of responsibilities on your shoulders increase when you are white labelling and sourcing from a private supplier. You have to tackle everything from product sourcing to branding to fulfillment.

As far as we see, that’s the only drawbacks of working with private sellers and sourcing agents as opposed to working with AliExpress sellers.

Conclusion

White Label Dropshipping works best for established dropshipping businesses who want to scale, without having to go through the hassles of product development.

You pick a winning product, brand it and sell. The key things to be aware of, are a reliable seller, a trustworthy sourcing agent and order fulfillment.

Once you have these in place, you can make much higher profits than you could with dropshipping alone.