As branding strategies evolve, tech companies continue to find ways to use white-labeling to create profitable apps. White-labeling refers to creating a foundational product or service that can be rebranded and further customized by other companies. This model provides a way to service many brands with one product that still looks unique to end users. In a previous blog post on fintech and mobile app development, we discussed the capacity of white-labeling to improve app integration and deliver data-driven tools. While there are many advantages associated with the decision to white-label a product, it is not without its challenges. We share our insights on the topic below. Learn how to use white-labeling to create profitable apps given the inherent strengths and limitations of the model.
Pros and Cons of White-labeling
Although the practice of white-labeling apps exists across various industries, the business model for all brands is the same. Suppose you want to create a white-labeled “all resorts” app to service property management companies. This app would need to include features that appeal to virtually all resort managers. For example, the app could include the ability to view specific amenities of a resort upon selection. Property managers could further customize the app each time a resort is added to the product.
Although creating one product that services multiples resorts is more efficient, this technique has its limitations. A significant con to white-labeling is the appearance of a lack of uniqueness. Using the all resorts app as an example, this product may be less appealing to individual resorts since they don’t want to be listed side-by-side in the same app with their competitors. Resorts would prefer to own their customer relationship and create the impression that they’ve done something unique to serve them.
On the other hand, the model benefits property managers because it is more efficient to maintain one app. It also simplifies things for users since they only need one app to access information about multiple resorts. White-labeled products also cut out the time and expense required to build users’ trust. Instead, companies deliver customized products to their existing loyal customer base. A customer who is familiar with a particular property management company is more likely to book a resort from its app. For this reason, white-labeling is especially useful to industries in which trust is paramount. This is why financial and medical institutions rely heavily on white-labeling.
Considerations for Developing a Profitable White-labeled Product
Limitations on brand-specific features
Limitations on brand-specific features substantially impact how producers use white-labeling to create profitable apps. Brands invariably request new features that may only be relevant to them. Offering no brand-specific customization is easiest for white-label providers. The more brand-specific features added to an app, the more difficult it is to maintain the app over time. It is tempting to individualize features in order to appease customers. The temptation is especially strong when a business is starting and revenue is especially critical. However, restricting the number of brand-specific features is key to profitability.
The cost to develop a white-labeled product is relatively low at the start. Expenses grow over time as more brands (with more needs) are added to the platform. Ideally developers should strive to flatten out the expense curve so that the cost to add a new brand to the app is small. Setting limits on brand-specific customization is key to reaching this goal.
The adoption of white-labeled products by multiple companies results in the availability of similar looking products that market themselves as being unique to a specific brand. This outcome inevitably presents a challenge to using white-labeling to create profitable digital products. It has also contributed to some pushback from Apple. Initially Apple chose to reject submissions from white-label providers. Apple later relaxed its policy to allow white-labeled products to be created so long as each brand creates its own developer account and publishes its rebranded app through that account. This stipulation aims to strike a balance between Apple’s interest in an “app store cleanup” and the growing popularity of white-labeled products. Developers interested in creating profitable white-labeled products need to stay informed of these evolving restrictions.
The design of white-labeled products needs to be general enough to be adopted by multiple brands yet specific enough to capitalize on niche markets and their goals. For example, Intel used white-labeling to create a gaming laptop that’s similar to a lot of other laptops but also has qualities that appeal to a specific market. The new product for gaming enthusiasts is conducive to white-labeling due to features including “an advanced cooling system, excellent performance, great build quality, a light chassis, and shockingly good battery life.” The same connection between profitability and embodiment of a middle ground between generic and targeted features exists for white-labeled apps.
Alignment with Emerging Trends
The most profitable white-labeled products provide services that are becoming increasingly popular. If relabeled products don’t reflect relevant trends, then they are unlikely to provide a launching point from which multiple brands can service a growing need. White-labeled products that are at the forefront of new trends are also able to acquire data that will become increasingly valuable over time. An example of a timely white-labeled product is Greenlight, a debit card for kids that was recently white-labeled by Chase. Fintech is now essential to personal banking. Therefore, apps that capitalize on this growing trend will be highly valuable to top brands.
InspiringApps has extensive experience developing white-labeled products for organizations that are influential in numerous sectors. Contact us today to find out how our team can help you use white-labeling to reach a diverse set of organizations.