In an evolving world where social media and technologies are becoming increasingly popular, the benefits of e-commerce are endless. When we talk of e-commerce, trading comes to mind. The old trend of buying or selling from manufacturers has birthed a new thing known as a white label agreement.
This is a concept that involves the manufacturing of goods or services by a company and its usage or sales by another company under its brand name and trademark. We all love to buy good things and what we look for in a product are branding and the company’s reputation. So, why do we expect more?
Normally, entrepreneurs manufacture their products under their names and sell them. But in most cases, it causes problems, and for the 21st-century business trend, customers value brand identity and reputation. With that, you get to see entrepreneurs selling products manufactured by other companies.
Besides, it burgles down to the concept in which retailers sell products manufactured by other companies. Today, the white label is widely used as a strategy in many companies to increase their sales and meet their expectation. And, of course, you can see this in the production of foods, electronics, appliances, and many other things, to mention a few.
As we said earlier, e-commerce literally plays a vital role in the white-label agreement concept. Since it’s a completely new dimension in the world of business, it overcomes the barriers created by international bodies. You can now expand to reach more markets than you would have been without it.
Benefits of White Label Agreements
This article explains why a white-label agreement is essential before you sign up for one. Not only that, but we have compiled the things that can be included in the white-label agreement template. Are you ready to see what we have unleashed? Continue reading to get a glimpse of the news.
From the name; white label agreement, you already know that it is a contract between a seller and a buyer. This agreement covers the production that comes from the manufacturer and sets a rule for the retailer under which he may decide to brand the product from the manufacturer. It’s very important to secure your business deal with any organization. Below are some of the things included in this agreement.
Product Quality Vet or Warranties
One thing the reseller needs to understand is product quality. No one will purchase a product without a warranty, or who would love to buy an expensive product and use it for five days? With that in mind, the manufacturer must ensure that the product has been vetted and it is in no way of hazardous nature.
In addition, it should be duly searched to ensure that the product is in no way infringing the right of any person, including the right related to intellectual property. Here’s some advice; beware of fake products and get the goods from a reliable brand with a good reputation.
Partnership Agreement
White label agreement isn’t complete without getting to know the reseller agreement terms and the benefits. As a retailer, it’s your right to ask necessary questions when needed to understand the kind of business you’re doing. This also helps you to know that you’re not in a partnership or joint venture with the manufacturing company.
Exclusive Ownership
While the right of ownership remains to the manufacturer, it should be stated that all goods can be redistributed to other retailers. This means the supplier can exclusively provide the goods to other retailers. And if some cases where you need the goods alone, you must specify and do the legal signing.
Liability Agreement or Allocation
Your agreement isn’t complete without the allocation of liability that governs the manufacturer and the reseller. If the products or goods have slight damage or peradventure found to be defective, the allocation of fixed liability should be included in the white label agreement.
Solicitation and Intellectual Property Rights
Another thing to note is the solicitation and the intellectual property right. Your white-label reseller agreement should contain a clause pertaining to Nonsolicitation. Aside from that, it should clearly state whether or not your manufacturer will give you the license to sell the product according to your will. Moreover, the agreement should also include the right to the retailer’s trademark and copyright.
Ordering and Pricing
No product will come from a manufacturer without the pricing plan. That said, you need to have an agreement about the pricing strategy. Will you sell at your own price or resell the product according to the ordering and pricing given to you by the manufacturer? So, keep your eyes open to the instructions.
Repair Services and Customer Support
In wear and tear cases or peradventure, you notice the product needs repair after purchasing; what do you do as a retailer? Would you love to return the goods, contact support, or repair them with your money? This should be in your agreement, so you’ll know when to return a product or fix it yourself. Also, you need to see if you have the right to contact customer support for information.
Product Specifications and Documentation
You need to have the right documents that indicate your partnership or product purchase from the manufacturer. So, this will also be included in the white label agreement sample to ensure you’re on the same page with your seller.
Understanding Marketing Affiliates
Since a white-label agreement is also used to determine the contract between the manufacturer and the retailer, you need to know how the revenue will be distributed. The agreement should also include the terms or what happens when a customer accesses the company’s website by using the affiliates.
That’s what leads to the term Marketing Affiliates. This marketing concept refers to the entity responsible for maintaining a website or other online pathways that link the manufacturer to the retailer. So, when a white label agreement is in place, it automatically allows the marketing affiliates to establish and promote the original company’s product on the affiliate website.
Pros and Cons of White Label Agreement
Everything has its advantages and disadvantages. In no other news, below are the pros and cons of the white label agreement.
Opportunity to Invest
White label agreement gives an edge to the retailer to sell and make a profit from the manufacturer’s existing goods or services. On the other hand, the reseller is limited in some way because the R&D parts are under the sphere of the manufacturer’s authority. And if an agreement is not met, disagreement can flare up.
Selling Without Incurring Additional Production Cost
In white-label marketing, a manufacturer can sell his product without incurring the additional cost of advertising. But if the manufacturer is to sell the product directly to the consumer, he might incur certain costs. And one of the advantages is that it helps the manufacturer expand the spectrum of customers.
Building Reputation
If the goods or products deploy to the retailer are of good quality, it will help increase the manufacturer as well as the retailer’s reputation. On the flip side, if the final consumer cannot approach the manufacturer directly because of the wrong product, it becomes a little disadvantageous.
Final Verdict
Western experience shows that white-label agreement increases brand reputation and allows start-ups to enjoy the benefits. It defines what manufacturers and retailers need to know before signing a contract. Moreover, it eases the burden of advertisement and promotion. So, you know what white-label agreement entails now, right? Hurry up and get yourself one white-label template today!
