White label agencies are the secret behind the success of many businesses around the world.
But before we dive into details, let’s get out basics right…
What is white labeling?
White labeling is when a product is produced/manufactured by one organization (A), but is sold with the packaging and label of another (B) as a white-label product.
If it sounds shady to you… You don’t have to worry, it’s not.
White labeling is a 100% legal process that is common practice in almost all industries.
Think electronics manufacturers, eCommerce fulfillment businesses, beauty products, supplements, packaged food, plastics, furniture, etc.
But where do white label agencies come into the picture?
What is a white label agency?
For services and in the digital world: White labeling is when a company (X) buys the services and work of another company (Y) and presents it to the client under their own brand name (X).
In essence, using a white label agency is like outsourcing your work to another agency, but still getting full credit for all work that is created or executed.
And their popularity is only growing as time passes.
In fact, according to a survey by Upwork, in the past 2 years, 61.9% of companies are planning for more remote work to continue in the years to come.
And with this growing acceptance of remote work internationally, offshore white label agencies are fast becoming a lucrative option for many business owners.
But, why would one agency reach out to another agency for the same thing?
Simple. For getting an advantage over one or more of the holy trifecta of business success: lower cost, better specialization, or faster turnaround time.
How do these white label agencies work?
Just like other outsourcing agencies, white label agencies also have their own areas of specialization in which they excel.
White label agency specializations include:
CRO (Conversion rate optimization) services
Web app development
Legal services, etc.
There is a range of white label agency options for every niche of services in the world.
But the most popular might be white label marketing agencies. If fact, many would go as far as to say that white label agencies are the backbone of the digital marketing world.
Digital marketing strategies are constantly evolving, and it can be hard for any small t medium-sized agency to stay on top of all the trends across niches.
And most clients that come in need a range of work done across the spectrum of their digital marketing assets.
So if a marketing agency that specializes in SEO, also needs to deliver SMM work for a client, then a white label marketing agency is probably their best bet.
They can simply outsource all the SMM work to the white label agency, and then deliver the end solution, strategy, or content to the client as their in-house creation.
But is that all there is to the picture?
What are the pros and cons of working with a white label agency?
Benefits of working with a white label agency:
1. Reduce costs and increase profit margin.
As we mentioned earlier, the lowered cost of delivering services is a major benefit of hiring white label agencies.
With a white label agency doing all the work for you, you no longer have to bear the exorbitant costs of maintaining an in-house team of specialists.
This means reduced expenses like:
- Salaries (and PTO, benefits) for full-time employees
- On-boarding and training costs for nurturing and improving employee’s skills
- Additional salaries of mid-level team supervisors and managers.
- Overhead costs like rent, electricity, tech, software, etc.
2. Expand your services.
You can broaden your scope of services and specializations with a white label agency by your side. So you don’t have to limit your revenue sources to just what your in-house team is capable of.
You could hire a white label agency for a one-time project, that your existing client has asked for. (Instead of saying no, because you don’t have the right specialists in your team!)
Alternately, you could have a white label agency on retainer for executing all clients in a specific niche.
Like outsourcing all your PPC and copywriting work to a partner white label agency, but handling the SEO and web design work with in-house talent.
3. Instantly scale up your service capacity.
Not only do white label agencies allow you to take on work without hiring in-house talent, but they also allow you to scale up your services.
This means you can take on larger projects or deliver work faster in peak seasons, without breaking a sweat.
White label agencies can act as a support arm for your in-house team or can help you handle any extra projects that come your way.
All you have to do is share your requirements, and process, assign a dedicated manager, and they will take care of the rest.
4. Improve your service quality.
Having a “jack-of-all-trades” employee on your team is a great way to get things done, without bleeding yourself dry.
But if you want to really grow and succeed in your niche, then you need to aim to deliver higher quality work. The kind of work that is done by a true expert in the niche.
Now you could simply hire an expert freelancer for the job, and get it done. But freelancers can be expensive, unreliable, and have a limitation on the amount of work they can take on. But more importantly, they aren’t always comfortable when they don’t get credit for their work.
White label agencies, on the other hand, tend to have an entire team of niche specialists on board. A team that can take on and execute entire projects end-to-end. All while still costing you less than it would be to hire a team of experienced freelancers for the job.
So you get all the credit for the superior quality work and boost your brand reputation without any extra effort from your end.
It’s a win on all fronts we’d say!
But let’s not get ahead of ourselves, and make everything look like sunshine and rainbows. There are a few downsides to white label agencies.
Cons of working with a white label agency:
1. Liability for low-quality work.
While you (and your brand) get all the credit for all the amazing, high-quality work done by the white label agency. You also are liable for when the quality of services falls below the client’s expectations.
To avoid this, don’t fall into the trap of hiring the cheapest white label agency in the market.
Ensure you do a thorough background check on their past results and portfolio claims. Interview their team, vet talent, and hire a white label agency with rigorous quality control systems in place.
2. Lack of control over end result.
If you have a very specific in-house style or process, it will be hard to offload that to a white label agency.
A white label agency will take your brand style and systems into consideration. But they will not be as trained and attuned to your standards and style as an everyday employee might be.
So if you are a micromanager, or have an extremely specific brand style or process in place, a white label agency might not be your best option.
3. Potentially, more work for you.
Hiring a white label agency can be a tricky game.
You hire the right agency, that fits your company culture, workflow, and pace, and you’re set for life!
But hire the wrong agency, and you’ll find yourself working double-time. You’ll spend all your time following up with them, reiterating requirements, and sending work back for revisions.
So whether a white label agency reduces your cost, improves work and speed depends entirely on the agency you hire.
So be incredibly careful before you hire a white label agency. Inquire into their communication systems, and workflow processes. You could even request to have a direct conversation with your dedicated team members before hiring.
And even then, always hire them for a small test project first, before committing to a long-term retainer with a white label agency.