We are often asked if we are able to white label our services. If you’re not up on the terminology ‘white label’ means to take our existing services and brand them up as if they are someone else’s, we’ll call them the ‘reseller’. But the question is, should we do this?
How does white labelling work?
Our Online SMS product textburst is the main one, but we also get requests for our SMS API, and our email to SMS product.
The reseller offers the service to their customers or markets in any way they feel fit. They take care of the billing, collect the money, provide support etc. We just exist in the background as their little secret.
The truth is we have offered while label services for many years but have had little success other than via a few reputable organisations such as O2.
The Problem
Many resellers see your application as a nice piece of technology. They think if they rebranded it as their own they could sell it to their existing customers, make a million and retire on a beach in the Bahamas. But it just doesn’t work like that.
We used to do loads of free while labels in the hope that we’d benefit by extending our reach, but so few come to anything it’s not been a priority.
About 2 years ago we introduced a nominal £500 to while label textburst, what happened was interesting. We certainly scared a few would-be resellers off. In my mind anyone not willing to pay £500 was indicating that they were not confident of their own ability to sell the product. Those that did pay in general sold more than those that hadn’t.
A solution?
Back in January we released our latest version of textburst and removed the ability to produce new white labels easily. Hence the £500 option is now gone completely. All white labelling is bespoke and we don’t look at it unless we feel the potential reseller can actually resell.
But the question I’m now left with is this: In our experience very few while labels have been successful at all, so why does anyone do it? We spend an inordinate amount of time developing our services and intellectual property, should we really be passing this on to anyone who thinks they can sell SMS?
There are literally hundreds of web applications out there who offer white label services, but is that not undermining the value of your own investment and brand. If your application is so great why would you want to make it look like someone else and let them take the brand value?
What we do now is much simpler, we say just introduce the client to us, we’ll do what we are good at, you do what your good at, and by way of a thank you we’ll give you some commission. Surely that can’t be wrong?
I guess the decision to white label or not depends purely upon your circumstances and more importantly what your customers expect.
Some people may wish to white label a web app because they’d be afraid of their client ‘cutting out the middle-man’ as it were. Personally, I think the transparent approach is the best but I can understand why others want a white-labelled solution.
The attraction for white labelling of solutions, particularly software, is that it offers an indirect channel route to market and many software vendors see proliferation of a technology as success in itself. The issues however are twofold and inextricably linked.
Firstly no investment in the technology from the reseller usually results in little value being attached to the technology and therefore less commitment to the product, as your evidence would support.
Secondly, and for me most important, is it lowers the barriers to entry for your competitors. Why work hard to develop a quality solution, and service, to then have a third party compete overnight and potentially put at risk the reputation of the solution due to the aforementioned lack of commitment to the product.
Hi. I see your argument but dont wholly agree with what you are saying as i think it applys to specific situations and markets.
I think we will be speaking more in due course relating to some specific project work in Africa.
Rajesh Parmar
Cloud Interactive Associates
Internet plays a major role to the clients to get their needs that normally they would never been able to get.A lots of business today are going online.White label solutions is one of the most profitable business nowadays.It allows your business to offer more services to costumer with the best possible quality. They can remain as a private label and market all services as their own.
Some may agree and some may disagree to white label their services. I think it depends on the need of the company. There’s always a team on each company that discusses the pro’s & con’s and again it will depend on the companies goal, standards or marketing status.