“White labeling” is a common practice in digital marketing as well as many other industries.
Essentially, white labeling is when you purchase a product or service from a third-party supplier and resell it to your customers as if you produced it yourself.
For example — an SEO agency purchases content from SEOButler for use in a client’s campaign. As far as the client is concerned, all of the work behind the campaign is conducted by the agency in-house. But, in fact, the content creation is outsourced — or white labeled.
A partnership, in this context, takes place when the agency outsources aspects of a campaign transparently. The client is aware that third-party suppliers are providing certain elements of the campaign, and often the client is billed directly by the providers.
It’s not difficult to imagine why some SEOs and agencies are more comfortable with giving clients the impression that all the work on their account is being done in-house.
But the partnership model has its advantages — so much so that both Jonathan and Jarod prefer it to white labeling.
Find out why by listening to EP.02 of the Value Added Podcast, featuring SEOButler founder Jonathan Kiekbusch and Blue Dog Media head honcho Jarod Spiewak above, or check out the summary below.
After years of experience working with white label and partnership structures, both Jonathan and Jarod much prefer to go the partnership route today.
Jonathan sees the value in white labeling aspects of a campaign — for example, content and link-building — while handling on-page SEO and overall strategy in-house.
Many SEOs and agencies find white label appealing due to the belief that they can resell white labeled products and services at a significant markup from cost.While you may be able to find suppliers that are significantly undervaluing their products or services, in many cases, you get what you pay for.The temptation to get greedy when marking up white label services is enormous. But while you may get away with significantly overcharging clients in the short term, you’re putting your long term relationship at risk.
White label makes it tempting to “churn and burn” clients instead of building long term relationships.
White labeling frequently leads to bottlenecks. Without your client’s knowledge, you’re essentially acting as an intermediary between them and a third-party supplier.This inevitably leads to delays when issues arise, which can quickly tarnish your reputation with the client and make you appear unresponsive and unprofessional.
Conversely, building a campaign using a partnership model eliminates much of the admin involved in white labeling — everything from customer support, to reporting, to invoicing and collections — because your client is billed by your partners directly.
In a partnership, you typically earn a commission of between 5 – 20% of the amount billed to the client.
By being more transparent, you’re able to improve and build on relationships with both your clients and your partners.
By partnering with the right suppliers for each client, you gain the benefit of the partner’s track record and experience — potentially making it easier to both upsell clients and attract bigger ones.
By drawing on the expertise of your partners, you almost always end up providing a better overall service to clients as compared to doing everything in-house.
White labeling has its place — particularly if you’re working with clients on very small retainers of $500 or less per month.
Many SEOs and agencies that Jonathan and Jarod have encountered fear partnerships because they’re afraid that their partners will steal their clients.
One potential downside of partnerships — for entrepreneurs aiming to one day sell their agency — is that revenue coming into the business is unlikely to be as substantial as if you’re billing clients directly by white labeling or doing the work in-house.
When seeking partners to provide aspects of a client campaign, look to suppliers who have done high-quality work for you in the past.
Leveraging and expanding existing relationships is typically more reliable and less time-consuming than cold-calling potential partners out of the blue.
In conclusion, both Jarod and Jonathan agree that partnerships work better than white labeling in most instances — particularly when servicing high-value clients.
Do you have any experiences with white labeling vs. partnerships that you’d like to share?