White Label SaaS Products: Are They Legit Enough to Sell?
May 14 2020
White-labeling services for SaaS products have become very popular over the past decade. When done correctly, an entire brand can be built around a SaaS white-label product, but you’ll need to price it correctly in order to maximize revenue.
White-label SaaS products are generic products made by a third-party supplier, then rebranded for many different companies. The company selling the white-label software will place their logo and trademarks on it, but the software’s IP is owned by another business.
4 common white-label SaaS products
In some cases, although there can be some limitations in terms of control over an app’s features, design, and functions, it can be a way to get a profitable SaaS business out on the market quickly, with minimal financial investment.
Social media management software
This is software you can use to help manage, post, and respond to social media interactions. Used often by agencies and social media companies, a white-label social media platform allows companies to brand an already functioning system rather than building it themselves. Either they use it as their own, or they resell said platform to another company. Companies will invite clients to a limited interface, so they won’t be able to peek into other dashboards and any tools you would use to do your job better. Vendasta and socialbakers are two great examples of social media management platforms.
There are many mobile apps that do more or less the same thing, just with a different skin and different brand names. A great example is LevelUp that not only develops their own mobile payment and loyalty program app, but they also white-label it for restaurants like sweetgreen and Dig Inn, so they can market and promote it as their own.
SEO and SEM management software
If companies don’t have the time to provide SEO services to customers operating small to medium-sized companies, they consider hiring a white-label SEO partner to help generate revenue and expand reach to their clients. Re-sellable SEO services are more popular than SEO software, simply because most business owners don’t have the time to research how to do SEO professionally. Large brands like Serpstat offer SEO and SEM dashboards, as well as management software for their clients. Check out HubShout’s white-label SEO capabilities.
Email marketing software
Email marketing is a must for any business. Being able not only to send, but also track email campaigns, is vital for marketing efforts. Companies are able to add their own branding to the software and create customized dashboards that they can then reference or have clients reference. The key selling point to white-labeling is being able to completely customize the solution to look and feel as if it’s yours. HubSpot, for example, is not your typical white-label email marketing software—they offer the ability to join the HubSpot Partner Network. The network offers perks like exclusive access to support, events, and even being able to publish on the HubSpot blog. It’s a great option for agencies.
So why white-label?
White-labeling is the best way to provide a software solution without having to build it from scratch. It can save you money, time, and it doesn’t require any expertise. Depending on a company’s focus and/or goal, choosing not to build a solution may just make more sense for the reasons listed above.
No expertise needed
If you want a software that does something for a client, but don’t have the expertise to build it, you can use a white-label product. Businesses choose to utilize white-labeled products because they can still provide a solution for a client, without a need for expertise—they can concentrate on what they are experts at.
Less money and time spent
Developing a solution from scratch takes a large amount of resources, money, and time. As mentioned before, using a white-label eliminates the need to spend money and time on R&D, testing, and engineering. The only expense that comes into play is the licensing fee.
A solution built in-house might feel like it’s the way to go when building a company or organization, but you may quickly find that the effort can derail internal business processes and exceed budgets. It’s important to factor in time and cost—can you afford to allocate a good amount of both? If you don’t, white-labeling is a great option.
By investing in white-labeling, companies are able to increase the scope of their offerings which can then make them more attractive to new customers, as well as existing ones. Adopting a white-label solution will accelerate responsiveness to a customer and meet their demands. Rather than spend all that time building their own solution, they instead can use that time to deploy a white-label solution, acquire customers, and then continue to delight them with their own branded, working platform.
How white-labeling works for SaaS products
Customizable solutions for your SaaS tech stack can lower costs, save time, and create that branded look your business needs to stand out. There are several check points you need to go through in order to start selling and using your white-labeled product.
Find your needed product
Once you’ve decided the direction your company is going to take, and you’re indeed going with a white-label product, you’ll need to research to see if there are any businesses willing to white-label that product for you. Let’s say you want to provide a social media management platform, but don’t want to build it. You’ll need to find a business that is not only building a social media platform, but that is also willing to white-label it for you.
Test the product
It is absolutely essential to test the white-label product you will be reselling to customers. Whether it’s through a freemium model, a free trial, or even if you have to invest a small amount to get a prototype. You’ll want to give the product a test run to see if it’s worth using and putting, not only your branding on it, but also offering it to your customers.
Pay licensing fees
The licensing fees are the costs associated with using a white-label product. When it comes to SaaS, license fees are on a subscription basis just like any other SaaS product or tool. You are paying an annual or monthly subscription to use the product, brand the product, and resell the product as your own.
Adjust logos and trademarks
Once you’ve agreed to the terms with your provider and paid the license fees, you can adjust the platform with your own design, and colors to match your brand. Adding your own logo is crucial, but other things, like changing the font and its size, will also help embed your organization's brand onto the product.
Sell to customers or give to clients
Whether you’re using this software to make sales, or resell to your clients, you can use this software as you please. The choice is yours.
Why most white-label SaaS solutions fall behind
While you can argue that it is easier to opt for a white-label solution than to build one from scratch, you do give up some control. Here are some common challenges of SaaS white-label products.
If you plan on selling a white-label product, you’ll need to do some serious research to find out exactly how to price it. Without building the product from the ground up, you lose touch of how much time, effort, and manpower went into actually developing it.
You don’t want to spend time guessing and settling on a price because it feels right. Growing a subscription business isn’t easy, so ensuring your pricing is adequate is crucial for your success. But developing a pricing strategy can be overwhelming. There’s a lot that needs to be evaluated—we can help with that. Price Intelligently makes pricing easy by partnering with our team of pricing specialists and our proprietary software to ensure your pricing strategy is driven by the most accurate data.
Lack of metrics
How are companies using white-label services keeping track of key metrics like churn rate, usage, and even revenue? If you’re not keeping an eye on these things, you could lose customers at a rapid rate. You also have to ask how robust and accurate is the reporting you’re getting from your white-label product? It may be designed to work well for your branding and its overall functionality for the customer, but what metrics are you able to track?
ProfitWell Metrics can provide all of your subscription reporting in one place with absolutely accurate, real-time subscription reporting analytics. Get a high-level view or dig deeper to see trends from new customers, existing customers, upgrades, downgrades, and churn.
The biggest pitfall is buying into a white-label product that isn’t resellable. If you buy into something that doesn’t translate in the marketplace then you’ve wasted time and money. There are a lot of free options available for your customers to try, so find a solution that stands out and offers value that customers are willing to pay for. Not to mention, being transparent and building trust with the customer will also go a long way.
2 Real-world white-label examples
Whether it’s SaaS, a mobile app, a manufacturer, or even a service as niche as a virtual luxury concierge (there is), white-labeling is incredibly prevalent.
LevelUp originated as a mobile payment/loyalty program mobile application. At first the app was designed for people to use as a form of payment at small quick-serve restaurants, but has now moved into the website and app development space. LevelUp has designed the mobile app and online payment portal for restaurants like sweetgreen, Pret A Manger, and Zaxby’s. Most of these restaurants don’t have the capacity to build and create their own website or mobile app, so using a white-label product is a great option.
Stream LXP, formerly known as Curatr LXP, is a fully customizable eLearning SaaS platform. Developed by the team at HT2 Labs, a Learning Pool company, Stream LXP is a social learning platform that allows license holders to brand the platform with their unique look and feel, as well as upload company-specific learning content. It can also be licensed and then resold to a third party. So, not only can the entire platform be redesigned to fit your brand’s look and feel, the actual content that is used in the platform, can be curated from your own resources.
Track your white label metrics
At ProfitWell we have made it our livelihood to solve the hardest parts of subscription growth, and that includes working with white-label products. We’ve built outcome-centered products that reduce chun, optimize pricing, and grow your subscription business end-to-end. Whether it’s providing you with absolutely accurate subscription reporting and analytics for free, or becoming experts in credit card failures and pricing strategy to automatically reduce your churn and optimize your monetization, ProfitWell exists to get you back to your customer and your product.
By Patrick Campbell
Founder & CEO of ProfitWell, the software for helping subscription companies with their monetization and retention strategies, as well as providing free turnkey subscription financial metrics for over 20,000 companies. Prior to ProfitWell Patrick led Strategic Initiatives for Boston-based Gemvara and was an Economist at Google and the US Intelligence community.