We are frequently asked, “How many stores do I need to have before considering white-labeling products?” We believe you should have about 15-20 stores in a given market to achieve the full benefits of white labeling. Consequently, you can venture into white labeling with your fast-selling items. Additionally, you can white-label your slower-selling products for increased profits.

We often see two to three owners, usually family members, who join together to meet this number of stores for cost-effectiveness. With as few as 10 stores, one can white-label fast-selling items. Sometimes, this creates issues when competing with national brands and may increase your costs on these brands.

The main advantage of white labeling derives from providing flavors, mixes, or products not offered by national brands. As a result, you’ll be able to provide the most popular flavors in your region. Creating a brand unavailable in the store across the street helps drive repeated long-term business to your locations and promotes growth.

It’s important to note that volume drives white-labeling product prices. You can expect to pay similarly for white-label products as national chain products until you are well-established in your sales. Over time, you can expect up to a 15-20% reduction in the cost of goods as volume increases. The cost of goods, however, is not the main benefit of white labeling. Instead, it is customer retention and growth in the quantity of sales.

White-labeled products cost more to produce than national brands since they are created in much lower quantities. For example, ROI is hard to establish in the first two years due to the time spent creating branding and labels. National brands have a much larger margin to sustain advertising costs and profits for their shareholders. However, white-labeled products can still be competitively-priced in comparison to national brands.

Convenience stores, gas stations, liquor stores, and corner pharmacies can benefit from white-labeled products as long as the volume of stores can keep up with sales.

In non-competing markets, we share product recipes, pack sizes, and some packaging under white-labeled products. The cost savings benefit all parties involved. As a result, this allows us to produce larger batches and only have to swap labels mid-production. Sometimes, a chain does not want to venture out of a market. If so, we can share branding with another chain or chains with similar situations in another market for further savings.