Approximately 80% of the population today uses mobile phones to meet their daily necessities, be it shopping, ordering food, purchasing groceries, taxi booking, etc. So, businesses look at this as a major opportunity to discover their potential customers. Mobile apps act as a great marketing tool to help businesses get ahead of their competitors, increase their brand presence, and improve the accessibility of their services to customers.
The enterprise demand for custom app development among businesses continues to rise, from 23% in 2014 to 32% in 2016. According to a ContractIQ report, 62% of organizations have an app or are in the process of developing one. Twenty percent use their apps for branding, thirty percent use them to generate revenue, and fifty percent use them for support and interaction. Businesses of all sizes & stages of development are investing in mobile to generate new business or expand existing ones.
When one begins the journey into the world of mobile app development, then there are two options, either build a custom app from scratch or use a white-label app builder. The idea of leveraging the white label software marketplace seems appealing and cost-effective, but it comes along with many flaws.
Today, we will be discussing white-label apps and cover the most asked questions on this topic, like the pros and cons of using these apps, the present and future of the white label marketplace, and the features of white-label apps in comparison to custom apps.
What is a white-label mobile application?
Let’s start by first understanding the true definition of “white label.” A white label can be a service or a product that is created by one company and is rebranded by other companies as their own. This approach is most commonly utilized for generic items and services that fall into the mass-production category. One example of white label service is Web and App Development Companies. Various IT services providing companies develop web apps and mobile apps for their clients and sell them to rebrand and resell as their own.
White label apps are the apps that are built by any private company to resell them to some other company for rebranding and reselling the app as their own. This concept came up as a solution to help businesses have their app with the least possible investment.
What is white-label marketplace software?
Using white-label marketplace software, one can easily launch and manage a branded SaaS marketplace. This software offers various user-friendly tools to customize the product to create a unique brand identity.
The most adaptable white-label marketplace software offers self-service features such as drag-and-drop tools for adjusting the design elements of the given UI, the ability to change colors and logos, and many other advanced adjustments.
In a nutshell, the sole purpose of this software is to allow businesses to have a unique brand identity that is otherwise lacking in most white-label apps.
How are white-label mobile apps sold?
There are two ways in which one private company sells white-label mobile apps to another company. They are listed down below:
- The first option that the company has is to sell the back-end code of the app and provide the other company the liberty to write the front-end code. With this, the client company can have more control over the UI part of the app. This way is not so efficient to be adopted as it requires a lot of time and resources to build the final app.
- The second method is the one in which the seller company sells the complete mobile app solution to its client (along with both the front end and the back end ). This is the most preferred solution as it is a one-time investment to obtain a complete package. Once they (the client) get it done, the app is sold after replacing the UI for branding purposes and creating their own brand identity. This method is much more efficient, but then there is very less scope for customization and scalability.
Difference between white-label mobile apps and custom mobile apps
White label mobile apps are ready-made solutions built for the industry. After buying, the client has to rebrand it and launch it in the market as their product. The major flaw in such an app is that it cannot be customized, so it is unable to cater to all the unique needs of businesses.
But when we are talking about custom mobile apps, they are specifically developed keeping in mind the unique requirements and the target audience of businesses. For this purpose, you can either hire developers for in-house app development or contact an authentic mobile app development company to build it for you.
Buying a white label app and building a custom app for a business are two completely different business models. Both of them come with their pros and cons. The choice depends on clients’ requirements as different businesses have different needs which are to be fulfilled efficiently.
Difference between white-labeling and private labeling
Private labeling
A private label product is manufactured/developed by a third-party producer only for one retailer or reseller. Third-party manufacturers customize products based on retailer standards, so the product is customized even before it is labeled.
Apart from the requirements, you, as a merchant, are responsible for all aspects of the goods, including branding, packaging, labeling, ingredients, color, and so on. Buying items from other companies, on the other hand, gives you a ready-to-deliver product in white label manufacturing.
White labeling
A white label product is manufactured/ developed by a third party but sold under your (the client’s) brand name. The product is not limited to a single store in this circumstance.
The manufacturing companies that provide the white label model are usually specialists in their field, so all you have to do is determine which products you want to sell with some minor customizations.
To sell our white label products in the market, you just need to invest in advertising the product. If there is a demand for that particular product, then your brand/company is in a win-win situation as the return on your investment is commendable. Whereas personal trademarks will cost you more money when trading private label products. Then there is also an added cost of gathering all of the essential data for product research, development, and marketing.
Pro and Cons of a white-label mobile apps
Because of easy accessibility and high-speed internet availability, the mobile app development business is gaining popularity day by day. As a result, there is a strong demand for mobile app development services and other cheaper alternatives like white-label app development.
The white-label software marketplace has various advantages that have to be considered. So, let’s understand the benefits of using white label applications.
Benefits of white label apps
- Cost-effective: The biggest advantage of choosing a white label app is its cost efficiency, as buying a ready-made app is much cheaper than getting a custom app developed by any company.
If you want to create a custom app, you’ll need to hire in-house designers, developers, BAs, project managers, QAs, and further team members. On the other hand, you can outsource solution development to a software development organization that will create your app from scratch.
The app development process in both of these scenarios involves substantial research, distinctive design, efficient development, and comprehensive testing. Each phase of development, when carried out exclusively for one app, is very cost-intensive. On the other hand, white-label app development companies sell their apps to multiple businesses. So they don’t charge you for the entire app development cost but only a small part of it.
- Improved focus: When you are choosing to obtain your app through the white-label marketplace, you enable your focus on just the marketing side of the business while your white label app provider performs the complex operations involved in the app development process.
The best part of this business model is that you need not worry about the development process at all, and you can now focus on more important things.
- Rapid solution: If you are looking for a quick solution to acquire the vacant marketplace through your business idea and don’t want to waste your time in the complex development process, you should choose a quick solution, i.e., a readymade product to enter the market. There are many businesses all around the world that have obtained an immediate product solution and launched it in the market for rapid profits using the White Label SaaS (Software as a Service).
- Maintenance: While using the white labeling service, the sellers provide their clients with a dedicated team of developers for tracking performance, resolving issues, and offering 24/7 maintenance service.
On the contrary, when you have opted for custom app development, the app belongs to you, and it is your responsibility to fulfill the maintenance process, which requires a lot of investment of time as well as money. Having a white-label app is again a better solution when we compare the maintenance complications involved in the two cases.
- No inventory management costs: While you rely on white label apps, you can rest assured that you will never be out of product. A synchronized demand planning, production, and inventory control procedure are always offered by a white-label service partner.
Drawbacks of white label apps
Besides various benefits of the white label app marketplace, there are many drawbacks associated with this business model that is too big to ignore. These are:
- Little scope for customization: This point has already been discussed above regarding customization. White label apps are ready-made solutions offered by any company with the complete source code as per the initial requirements, but when one is looking for scalability and flexibility, then custom app development solutions are the best option to go for.
- Build brand identity: Since your white label app provider is offering the same product solution to many other companies, there are high chances of brand overlapping as all these companies will have the same kind of component placement of their brand elements as yours. Ultimately, the app design and user interface do not seem to distinguish your brand from others in the industry.
- Complications in source code ownership: Most white-label app providers won’t be offering you accessibility to the app’s source code or server. Because of this, you have no other way of predicting the security of the source code that has been used in the app, and hence, you’ll never know how secure your user’s data will be on the server.
Every company wants to maintain a good reputation in the market, and if this flaw harms any customer, i.e., there is any case of a data breach, then your company’s reputation will be irreparably damaged.
However, when you create your app, there are no such concerts associated with security because you own the data in your app. Even if you delegate the task of development to an app development company, then also there is no such issue because the IP rights will be transferred to you so you can verify the server’s security.
- Data exploitation risks: Since most companies do not provide access to the source code/ server of the app, there arise various security risks like data exploitation which might result in damaging the brand’s reputation.
- Rejections from App Store: White label apps had been banned on App Store. However, they are still being accepted on Google and Apple app stores. Still, they face a lot of difficulties to be eligible to be published.
If you decide to launch an app with a common design, your app might run the risk of getting banned from the App Store. Even if you choose to publish it on Play Store, the platform is very particular about duplicity cases. If it is found that your design is copied from other apps, it might also take strict action against you. To avoid such risks, people are opting for custom mobile app development.
- Difficulty in scale and up-gradation: One of the major issues with white label apps is that the scalability part is very much limited here. A company cannot think of growing itself because of the lack of updates, and with no updates, there is no growth.
Some modifications can still be done by communicating your requirements to the source code owner but chafing the functionalities in white-label software apps is again a tedious task to be carried out.
On the other hand, growing your business with custom app development is much easier in comparison.
What kind of businesses can utilize a white label software marketplace?
Any small business looking to launch their business online or willing to reach out to a larger audience through the power of mobile apps can start a white-label software marketplace with low investment. However, here is the list of businesses for whom this marketplace is very beneficial at the early stage:
- Salon
- Beauty
- Healthcare
- Restaurant (+food delivery apps)
- Logistics
- Grocery
- Apparel
- Logistics
- Taxi Services
- Rental
- And almost any business with an on demand business model
List of common white label software
- Social media management
- Email marketing
- Mobile Applications
- SEO and SEM software
- Email marketing
- White label marketplace software
- Equipment rental software
- Edtech software
Conclusion
Both white-label apps and custom mobile apps come with their advantages and disadvantages. It is up to the business requirement and the willingness to invest in the development portion, which helps them (businesses) to decide the right choice to fulfill their customer demands. Thus, it is vital to choose the development partner wisely.
On the one hand, we have a white label product development that already comes up with various disadvantages, and choosing the right service provider can save you from tedious tasks and unavoidable risks. On the other hand, if you go for mobile app development, it comes up with the lowest risks, but then the investment is quite high, which is not feasible for small businesses and startups at initial levels.
So, if you own a small business, then a white-label app might turn out to be the best solution with the lowest required investment, and if you choose a reputed as well as a trusted company, then you are at no loss at all.
Now since you have got a clear picture of the white label marketplace software, I hope that you will make the right choice in your business as well. Choosing the right business partner is tedious work to do, but if done rightly, it can work wonders for you and can make your business attain great heights.
