White label resellers — 5 pitfalls to avoid when developing your business

// August 21 2018

A part of e-commerce, white labels have appropriated many services related to the digital world, from hosting to SEO strategy.

It is not a simple recommendation, or even subcontracting. The dealer fully appropriates the white label. The end customers will never know its existence: the solutions that are sold to them bear the reseller's brand. All for the good! In this symbiotic relationship, the white label focuses on its core business, while the "mainstream" retailer invests in customer relationships. However, in digital as in other markets, many resellers fail to sustain their business. What are the main pitfalls to avoid for a white label model to succeed? Many entrepreneurs take a passive intermediary approach: this error leads to others.

 

1.   Choosing the wrong partners

The co-dependence between white label and reseller must be recognized as the bases of the relationship. Pay attention to the following conditions:

  • The division of labor must be detailed from the beginning. Product implementation, customer relations, maintenance, etc. Most often, your white label supports technical skills. The associated payment method is part of the initial negotiation.
  • A flexible model will help you adapt to the needs of your customers. You can consider different scenarios in the distribution of tasks.
  • The white label must ensure the ongoing training of your salespeople. Make sure your teams have a special relationship with them.
  • Your customers must be treated in an appropriate manner, including after the sale.

Finally, many white labels also offer their own solutions. The less scrupulous ones might use you to explore new markets - at your expense. They will join you if the test proves conclusive. Protect yourself! Choose a trusted partner, and build a relationship with your customers that goes beyond resale.

 

2.   Launching without a strategy

The white label resale aims to put a new offer on the market quickly. It is so simple, that the reseller sometimes starts carelessly. It plans to refine its business model if the test is conclusive. But it is sometimes ill-prepared to manage the impact of the white label on its growth. Start by defining a solid go-to-market strategy. Shorter version of the business model, which consists in determining:

  • the offer and its sale - which depend in part on the white label partnership.
  • the target market, broken down into customers searched.
  • the financial model, with measurable targets and monitored indicators.

This is to control the integration of the white label with your existing model and targets.

To get up to speed seamlessly, launch in a formal experimental setting. Limited offer, freemium model, proof of concept, etc. A small-scale or phased implementation allows you to evaluate the maturity of your new offer and structure.

  • Win new customers quickly.
  • Satisfy a demand of their users.
  • Test a model or market at the smallest cost.

 You can obviously request your white label. Ask your partner about the experiences of their other customers, the development curve, or the mistakes to avoid. And ask for ad hoc assistance, especially during implementation.

 

3.   Misunderstanding the added value of white label

In most models, the reseller receives only a small margin on white label sales. If their market is competitive, the operation will be barely profitable.

White label resale will quickly create value for your business, if it complements an existing offer. It is a growth driver, not the growth itself.

The reseller uses it to:

  • Win new customers quickly.
  • Satisfy a demand of their users.
  • Test a model or market at the smallest cost.

For example, a town hall complements its range of services by offering its users to make an appointment online. An insurance group builds customer loyalty by adopting a suite of tools opening multi-channel exchanges. But a reseller who is content to play the intermediaries without creating added value is doomed to failure.

 

4.   Neglecting their role as a seller

We forget (sometimes) that selling is a job. Build a digital customer experience, acquire traffic, guide the consumer choice, etc. The activity of a (re)seller is not passiveYou must position yourself as the buying adviser for your customers. You listen to their business issues, and help them understand what they need.

Beyond their appreciation for your expertise, your customers will be sensitive to a customer-centric approach. You too, will switch to the seamless customer relationship: omni-channel approach, responsiveness, customized solutions, etc. Your customers must see you as a partner in their business.

By taking care of them, you also strengthen your partnership with your white label. After all, it is the outsourcing of the customer relationship management which has set them off on the adventure. Only authentic resellers who are capable of taking advantage of a white label model will emerge.

Far from being passive intermediaries, they will become the buying advisers to their customers. It is on this expertise that they build their added value and consolidate their offer, while taking advantage of an accelerated time-to-market thanks to their partnership.

  • Offer them an up-selling which benefits their growth. For example, why limit yourself to a click-to-chat application, when end consumers value an omni-channel customer relationship?
  • Cross-selling, via a tailor-made bundle of features, once and for all solve your customers' recurring problems.
  • Or, instead of engaging them on too large an offer, offer your customers a "quick win": a quick and easy solution to any of their operational irritants.

You find the best solutions on the market for your customers and strengthen your partnership with your white label.

 

5.   Forgetting to retain customers

Are you one of the companies that neglects repeat business in favor of prospecting? Your customers can well be intermediaries, spreading the word to your prospects.

Customer relationship is your added value!

Prepare the repeat business from the first sale, with a plan for implementing more complex solutions, and a preferential loyalty offer. Beyond their appreciation for your expertise, your customers will be sensitive to a customer-centric approach. You too, will switch to the seamless customer relationship: omni-channel approach, responsiveness, customized solutions, etc. Your customers must see you as a partner in their business. By taking care of them, you also strengthen your partnership with your white label. After all, it is the outsourcing of the customer relationship management which has set them off on the adventure. Only authentic resellers who are capable of taking advantage of a white label model will emerge.

Far from being passive intermediaries, they will become the buying advisers to their customers. It is on this expertise that they build their added value and consolidate their offer, while taking advantage of an accelerated time-to-market thanks to their partnership. 

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