A business model you may not have heard of: White Label Software

by pagesmack. Posted on Sep 10, 2020    2    14


Hi reddit,

I'm in a unique position that has allowed me to learn something that most might not be able to. That is, how few people understand what white label software is and how a business can be formed around it.

What is white label software?

White label software is software that is developed by a vendor who gives you the ability tot brand the software as your own and sell it or access to it to other people/businesses. For example, let's assume that Spotify was white label software. If your name was Jimmy, you would then brand the software as Jimmy's Online Music. Spotify would provide you with with the tools to manage customers, basic support questions, and potentially pricing. In return, Spotify may require you to pay them for a flat fee upfront, a monthly fee, commission on each sale you make, or a combination of these things.

Depending on the white label software, you may be able to modify the price as you see fit. You can market it where you want, how you want, and will own the brand that you create for it. The company who has developed the software would be responsible for everything on the technical end, including security, enhancements, and bug fixes.

What is good about white label software?

It allows you to own a tech company without needing to know anything about code. It puts the onus of product development, enhancements, technical support, and bug fixes on a third party so that you can focus your time on other functions that your business requires, such as marketing, accounting, finance, etc.

It allows you to start your company today as the product has already been built and tested.

While some white label software serve as stand alone businesses, some cater to business that are already established in their space. These seek to provide your existing clients with professional software that will boost the reputation of your brand.

What is bad about white label software?

While initial investment can be low, you'll earn lower margins on your software sales if you're required to pay the developer commission on each sale.

While some vendors are receptive to change and enhancement requests, not all are. If you want to start a white label software business, understand the product that you are buying into, the level of quality it represents, and the vendor's willingness to implement new features. Some vendors are highly flexible and will work with you to implement features in hours or days whereas others will reject such requests.

In theory, if enough people purchased the same white label software, they're would be competition amongst individuals with a homogenous product. Given the number of white label companies, resellers, and the large population that can be marketed to, the risk of consumers seeing ads for the same white label product (just branded differently) are low.

An example of white label software in action

www.pagesmack.com vs. www.flyguysites.com Identical software, different branding.

Do my clients need to know that my software is white label software?

No. So long as you're offering good support and are reselling a piece of quality software for a reasonable price, most businesses or people will not care that you aren't the one who wrote the code.

Ways to differentiate your product

Even though your white label software is the same as another reseller's, there is still opportunity for differentiation in:

  1. How you brand the product
  2. How you market the software and who you market it to
  3. How you interact with and get feedback from your clients (which can be relayed on to the developer)
  4. Pricing
  5. The level of support that you offer clients
  6. Other ways you add value for your customers (i.e. mailing list with articles that would benefit them, find complementary white label software and bundle as a package, etc). This is where you can get creative.

Flexibility in marketing

How you generate sales with a white label software business is entirely up to you. You can do PPC ad campaigns, email campaigns, Youtube ads, print ads, door to door sales (for B2B software) or cold/warm calling campaigns. At the end of the day, some of these cost money and others are virtually free. Your budget and your willingness to interact with people will dictate which option you go with. Marketing is going to take up a lot of your time and/or budget. If you want to run a white label software company, you need to be comfortable with the idea of learning about marketing (Youtube has all you need to know), metrics, and talking to people. If you want to run a tech company, but don't want to talk to anyone, I can assure you that this business model isn't for you.

Why white label software?

Today, there are a lot of people out of work and a lot of people trying to figure out what they are interested in, what they are good at, what they can afford to start, and and what the market needs. As someone who has never started a business, and even for some who have, this is a challenging task. In addition to service based businesses, I'd recommend that people give white label software a look. It's not for everyone, but I think it is for some people. Unfortunately, given how little it is talked about, I believe that many of those people for whom it would be a good fit do not know that it exists.

​

If you have any questions, feel free to let me know. I've currently involved in the white label software industry and will be able to help out with questions.

Have a great Monday!


Comments

hackersatan

Software is dead. There's a lot of monopoly in the market unless you're developing something clearly new. We all use the same number of softwares in our computers and apps in our phones. Think about services.

  pagesmack

In the consumer market, yes, I'd say that this is fair (i.e. that a lot of us use the same software)

SaaS (software as a service) and white label is primarily B2B (business to business). There are about a million and one software companies out there that produce software for other businesses that are selling software and doing well.

I wouldn't get into a white label software business that focuses on the consumer market, personally anyways. Having said that, I've never heard of such a thing.

hackersatan

People who have money to license a white label software and then sell it as a SaaS, would definitely try to make their tech indigenously with their own programmers so they own everything. People who don't have money, can't even license it bc it's not affordable. On the contrary every single dude bringing out their own version ot Spotify will kill revenue for everyone thus they will eventually stop buying the license for your thing. Companies that outsource tech also keep IP. So there's no target market to this White Label thing. Also, software died when people stopped buying CDs for them.

  pagesmack 1

People who don't have money, can't even license it bc it's not affordable.

This isn't actually true. Some white label software is setup with a low startup fee so that people can actually afford to start.

Also, software died when people stopped buying CDs for them.

I know a troll when I see one. Not responding to any more of your comments as you likely don't even believe the stuff you're typing. lol

hackersatan

Again you don't understand do you? If it's affordable then revenue goes down collectively if everyone is providing the same software with their label. You call me a troll? Well, you're a business failure the 90% of the people who don't succeed with their "OMG Billion $ idea" because they can't have perspective or don't have the balls to admit fault in their thing. Sure, cry then.

hackersatan

Nail in the coffin, RazirFin died. Lmao.

Derp_Animal 1

>Software is dead.

Ha... ha... hahaha HAHAHAHAHHAHAHAHHAHAHAHA!!

hackersatan

A hyperactive reaction, hmm,.you haven't even made a single software. Plus maybe you think everything on your device is software. Lmao. SaaS is something if you'd look it up. Hahaha.

Derp_Animal

I haven't even made a single software? Well... what can I say. I guess you have seen through me, it must be true, Chief!

The software space is exploding. Hundreds of billions of new lines of code will need to be written in the next few years. A self-driving car alone will require at least 1B lines of code to just work, versus 140k for an old spaceship like Apollo 11. And that is just 1 use case among millions of other use cases.

Software is far from dead or dying. I think your statement is ignorant at best, idiotic at worst. There is a lot of money to be made in the software space. A lot. The fact that you blatantly don't understand the definition of software nor see the opportunity is your problem, not the industry's.

hackersatan

You seem to be ignorant in what reference I've said Software is dead. If you bring out your music streaming software/app people wouldn't use it because they're already on Spotify or Apple Music. If you try video streaming, people are already on YouTube. The monopoly has made development of software useless unless your software is in new space or complete innovation. People care about Services that are unique & only use a specific set of software. Video editing? Final Cut Pro or Adobe. So, your whole idea of software licensing where I as an individual could bring out my own app, people wouldn't use it just because they're being provided quality content somewhere else. If you license an innovation (a new kind of software) rather than launching it yourself, you're a business moron then. Don't just take into consideration 1 line and try to change the meaning of what I've said. Because people like you try to develop "SOFTWARE" but don't care what people want. You failed with RazirFin, now you're here giving people wrong knowledge & manipulating meaning of others perspective, tells a lot about you. End of convo.

TheLandYouUnderstand 1

> If you bring out your music streaming software/app people wouldn't use it because they're already on Spotify or Apple Music.

Sure, that's true for a lot of stuff, especially things that need licensing agreements. But look at the history of chat apps. We went from texting to MSN, Skype, Messenger, WhatApp, Telegram, Signal, now Discord and Teamspeak, probably some I missed. All those companies/apps are doing well despite the competition.

SIG_94 1

RemindMe! 10 hours

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  pagesmack 1

Given the response to this thread, there won't be much to remind him of after 10 hours.