Should you white-label your product?
So here at DNAFit HQ, we have built a world class product that is now backed by ongoing research in the market. The result of this is we get featured in the media frequently as a brand of choice for comment mainly because we are an authority in the commercialisation of ‘Sports Genomics’.
It’s an example of innovating and disrupting a market that is entrenched in the lives of so many people and, when done right, can have the power to expand and grow to become a market leader that adds significant value to people.
As a result of the ongoing visibility that a good product obtains, many in the market will make an approach asking if they can white label it. The companies and individuals that make these approaches come from small sized companies to large multi-nationals, and this is where the decision and balancing act lies.
White labelling is when a company uses an existing company’s brand as a framework to develop their own conceptualisation. It allows that company to use an established product and not have the stress involved with focusing on developing their own brand from the ground up.
In a practical sense, if as an example only a global brand like Under Armour approached DNAFit and say “We would like to launch a product called the Under Armour Genetic Fitness test, but using the DNAFit product as the back bone technology” it would be very tempting!
Why? This would mean large volumes of sales that are guaranteed so the company can re-invest into research and further commercialisation, right? Not necessarily . Opportunities like this cause dilemma, as with it comes the possibility of the larger brand authority becoming dominant in the space and nobody remembering the award winning DNAFit.
My view is that ‘joint branding’ would be the way forward here. This way the company with the leading product still remains visible, and in the case mentioned above would build some brand equity by working closely with another major brand in the industry.
‘Joint branding’ is more of a partnership that allows both companies engaged in the white labelling of a product to maintain control over how the product is used, taking it in the direction that is suitable to the needs of both companies. By doing so, DNAFit would still be able to ensure that we don’t lose any potential clout in the market.
The challenge for a startup is that the opportunity of working with a large player is tempting, and although this might seem like a smart decision, the reality is that it is one that it might regret in the future.
All too often startups come up with an innovative idea that really works and changes an industry but then the bigger corporations who already exist in that industry make a concerted effort to absorb that company. It could mean some sort of positive financial windfall but is not something that companies who want longevity and growth should be keen on.
Sometimes companies embark on multi brand strategies, so that they have a number of brands for the same product. This means that they have more chance of reaching the consumer when the consumer looks for choice. Although this could be perceived as unethical it’s a reality of what happens out there in the commercial environment.
I must also confess that in the past I have found products to white label, which I have then used as part of a pre-defined strategy to build my own brand.. It makes sense depending on which side of the fence you are sitting, but a decision should never be an immediate one. We, as our own brand, have to consciously weigh up the pros and cons of such a deal, while making sure that it is beneficial to our long-term business strategy, and so should you.
