In the world of mobile apps, there is a big differentiation between OEM vs Private Label.
OEM refers to Original Equipment Manufacturer. OEM is a custom version of an app or program internally integrated with another company’s system and/or software. The app is built to the company’s specifications in order to work with the system as a whole. Then a company can sell that integrated system and software as part of the overall product.
A really simple example of an OEM is integrating a zipper into clothing. The zipper is made by a different manufacturer but is used in the overall product. Another example is when a car manufacturer incorporates another company’s engine into their vehicle.
Private label, also known as white label, is when another company purchases an app or program and simply puts their own name on it and resells it. In other words, slapping their own label onto a product from another company.
Either is an example of leveraging another product so that you can go to market faster. And, guess what? At Berry Wing, we offer both options.
We also offer customized solutions with our apps, Scan to Web and Scan to Spreadsheet. If you need solutions for your inventory, packing, tracking materials, then contact us for more information.
A private label product refers to a product that’s sold under a specific retailer’s brand name, but is manufactured by a contract or third-party entity. These products are also referred to as Original Equipment Manufacturer or OEM.
The retailers have full control over product specifications, such as its ingredients or the components used, how it looks like, its packaging and labeling. These retailers pay third-party manufacturers to produce these products and have them delivered to the retailers’ store.
Private labeling is a common practice among many retailers. Retail giants such as Costco and Target sell their own private label brands under the Kirkland and Archer Farms brands, respectively. It’s not just the retail giants who are engaged in private labeling products either. Other sectors, including grooming and personal care, clothing, and food and beverage, also have a wide array of private label products.
Here are some examples:
Salons and spas that sell
private labelproducts, such as shampoos, hair spa treatments, and nail polish
Clothing stores that sell their own
private labelapparel alongside other brands
Food and beverage products, such as cereals, juices, and condiments, that are marketed under a grocery store’s own brands
Other private label categories include:
Cosmetics
Dairy items
Household cleaners
Paper products
What differentiates a private label product from a white label one?
While these may seem like interchangeable terms, they do have their differences. White label products refer to products that are sold by a company or brand but without their brand and logo, are rebranded by other retailers and then sold under that other retailer’s own trademark.
Simply put, white label products are a “generic” product sold by a manufacturer that can be rebranded by other retailers and market as their own merchandise. One of the main differences between private label and white label products is the ability to customize. With the former, retailers have the full control when it comes to dictating what their products look like, what they’re made with, and more. With the latter, however, the products that are to be rebranded are already manufactured, limiting the level of customization that other retailers can have to the products’ packaging.
Moreover, private label products are more exclusive. Given their highly customized nature, it makes it nearly impossible for other retailers to market the same exact products. With white label products, however, the products are manufactured and are available to multiple retailers.
Private label products are mostly limited to physical goods, whereas white label products can include both physical and non-physical items such as services or software.
Private labeling has a host of benefits, including:
Retailers have total control over many aspects of manufacturing when it comes to private label products. Aside from being able to dictate the products’ size, package design, and ingredients or materials used, they also have the freedom to determine pricing and branding. The high level of customizability in private labeling makes it appealing to a wide array of retailers in different sectors.
Aside from being able to determine the products’ pricing, retailers that select private label products can stand to gain higher profit margins. Manufacturing a product generally incurs lower costs compared to buying premade items.
Unlike their white label counterparts, private label products are highly customized. As such, they’re highly exclusive and can help retailers separate themselves from the competition.
Private labeling is a great way for retailers to establish brand loyalty. Given their exclusivity, private label products have limited accessibility. This limitation can work to the retailers’ advantage and be used to build a loyal customer base.
For retailers that are interested in developing their own range of private label products, here are some tips to help you get started:
Do heavy research to understand how private labeling works
Determine the type of products you want to market
Determine who your target market is
Find out what makes your products stand out from those of your competitors’
Research on
companies that offer private labeling services
Once you’ve picked a manufacturer, don’t forget to request for product samples so you can check their quality