White label and private label dietary supplements - differences, costs and opportunities for brands

What is the difference between a white label model and a private label?

Contractual cooperation models allow placing goods on the market without having to maintain their own technological facilities. The choice between a ready-made and a dedicated variant directly affects the time of implementation and the degree of uniqueness of the assortment. Below we present an analysis comparing the two production systems in the food industry.

The concept of “white label” is based on the use of ready-made, proven recipes that the manufacturer offers to many entities, only allowing them to change the branding of the packaging. Private label, on the other hand, implies the development of a unique composition from scratch or a significant modification of the existing base, which guarantees exclusivity for a given formula. In the model of ready-made solutions, the customer receives a product with defined parameters, but has a limited effect on its physicochemical characteristics. The dedicated option requires full technological tests and stability tests for the new raw material mixture.

What are the costs of implementation in each variant?

Using standard formulas eliminates expenses related to research and development (R&D) and registration of specifications for new components. Experienced manufacturer of white label dietary supplements usually has lower entry thresholds (MOQs) for catalog items, which reduces the initial capital required for start-up. The implementation of an individual project involves the need to finance the purchase of unusual raw materials and to pay for the process of technology validation. The unit cost in dedicated production may be higher with small volumes, however, it decreases in proportion to the increase in order scale.

When is it worth deciding on a specific production strategy?

A strategy based on ready-made solutions works well when verifying market demand or supplementing the portfolio with standard categories such as vitamins or minerals. Building a competitive advantage through an innovative form of administration or a specific combination of active ingredients requires a transition to the private label model. The decision depends on the distribution policy adopted and whether the priority is the speed of availability of the goods or the precise matching of organoleptic characteristics to a strictly defined target group.

The most important information about the production of white label dietary supplements

• The system of ready-made recipes allows you to quickly put the goods on the market without spending on development research.
• The proprietary variant allows full control over the composition, but requires technological testing.
• Start-up costs in the standard option are reduced due to the absence of process validation fees.
• Dedicated production is combined with higher logistic minimums resulting from the purchase of specific raw materials.
• The choice of the path depends on the need for the uniqueness of the preparation in relation to market competition.

FAQ

‍Is it possible to modify the composition in the white label model?

Making changes to the finished recipe transforms the process into a private label model. This is associated with the need to carry out new stability and technological studies, which increases the implementation time.

Which variant is faster to implement?

Solutions based on ready-made formulas are available almost immediately, as they already have developed documentation. Creating a product from scratch requires several months of laboratory work and testing.

What do minimum orders look like?

For catalog products, entry thresholds are usually lower because the raw materials are constantly available in the manufacturer's warehouse. Dedicated productions require the order of the amount of raw material necessary to start the process line.

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