White Labeling Your Custom Software App

Recognize yourself for the genius you are! Having realized the necessity of streamlining and automating your workflow processes, you outsourced the development of a custom software application. Said application was developed by a stellar software development company and, hence, it is a game changer for you in your business. You are already saving a ton of money as your employees are more productive and can accomplish more in less time. You’ve increased your bottom line because you have grown your business exponentially by bringing in more customers, and you are able to support those customers without having to hire additional staff. So what’s next?

Can you package the product of your genius and sell it to others? Should you research the possibility of white labeling your workflow software application? Absolutely!

What is a White Label Product?

A white label product is a product or service produced by one company (the producer) that other companies (the marketers) rebrand to make it appear as if the product is theirs. We see this most obviously when considering the grocery industry. Nearly all grocery stores have their own brands on the shelves. Do they actually have a manufacturing facility that produces hundreds of different products for their brand? No they do not. Other manufacturers in the food industry produce the white label products, and the grocery store puts their brand on the packaging.

In the software industry, a white label product refers to a fully supported software application that is developed by one company and sold to another. The white label customer can then brand the application as theirs and sell the application as a software solution to their customers. White label applications give business owners the ability to provide software solutions to their customers without incurring the cost of building a software application from scratch.

For some clarity on this point, let’s take a look at an example of how travel agencies used a white label application to remain competitive as computing technology progressed and sites like Expedia, Travelocity and others came on the scene. They began offering white labeled online booking “tools” (cloud-based applications), developed by companies like Concur, to their business travel customers. Concur’s white label offering is Cliqbook, which returns better search results than their competition, can be customized to comply with a company’s travel policy, integrates with the travel agency directly, and can be branded with the company’s logo.

This white label solution was win-win for both the travel agency and their customers because it made the process of planning and booking travel more efficient for both the travel planner and the travel agency staff. Automating the travel planning process for the travel planner results in a reduction in man hours for the travel agency staff because they merely quality check the reservation made by the travel planner and book the itinerary. Additionally, the fact that Cliqbook could be customized to comply with the company’s travel policy set the travel agency white label software solution above every online booking application out there. In fact, these white label solutions offered by travel agencies forced Expedia and Orbitz to develop their own version of Cliqbook so they could try to gain a percentage of the market share enjoyed by the travel agencies.

Is Your Application White Label Worthy?

Unless your business is the only business of its kind on the entire planet and there will never be another one like your business to infinity and beyond, then your application is potentially white-label worthy. You will need to perform some market research to determine if there is a white label market for your custom software application.

It’s likely that the reason you decided to hire a software developer to build your custom software application in the first place is that there was nothing out there in the marketplace that meets your business needs. As we discussed in MVP — A Strategy That is Pure Gold, the feature set for many software applications is driven by a very small group of potential early adopters within a particular industry; and then for later versions, only the top tier customers. Could there be other business owners out there that could benefit from your custom software application? Probably.

Of course, the application must be well coded, intuitive, and offer a pleasing user experience or it will be DOA (Dead on Arrival). If you hired the right software developer to build your custom software application, then this shouldn’t be an issue.

Is there a Market Share for the Taking?

As mentioned above, market research must be performed to determine if there are more businesses out there like yours that could benefit from white labeling your custom software application. You may wish to consider compiling information on potential market share for white label, subscription, and licensure offerings for your custom software application. Your research may determine that there is no market for a white label software application, but there is a market for user rights to your application in the way of subscriptions to a cloud-based application or even licensure for a downloadable version of your custom software application that can be installed locally at the customer site.

Generally, it is more cost-effective for a business to white label your custom software application rather than incurring the cost of developing an application of their own. Why? Because, they don’t have to pay to reinvent the wheel, and a white label application is typically priced without implementation and support assistance. Some companies with white label offerings may provide implementation assistance for their white label application and possibly minimal support by way of email for the first 30 days or so, but after that the white label customer is pretty much on their own. These things must be kept in mind when determining a price point for your white label software application.

A Stepping Stone to Something Bigger!

The minute you begin offering subscriptions and licenses for your custom software application, you now have a software company which requires, at the very least, a support staff. Many companies, like MailChimp offer free accounts for users of their online email marketing platform; but there is absolutely ZERO support, other than Help files and online forums. If support is necessary, an upgrade to a paid account is required. Some type of support must be made available to users for paid subscribers of cloud-based applications, even if it is only email and chat support. When going down the road of licensure, offering all types of support, to include telephone support; and possibly even some assistance with implementation, should be seriously considered. You’ll also need to consider the costs associated with licensing your application, to include attorney’s fees. A white label offering could be an incremental development step in bringing your custom software application to a much larger market.

Ongoing versioning development of your application can still be outsourced for a long period of time because the capital and labor savings realized by using outsourced software developers is considerable, as we discussed in our blog article, What is the True Cost of Outsourced Developers?

Invent a New Revenue Stream!

As we like to say at Outfast Source, sometimes the best way to envision your future is to invent it! ROI for the costs associated with the initial development of your custom software application has already been achieved. Why not explore the possibilities of developing a new revenue stream for your business? Contact a software developer today to see if your custom software application has white label potential!

This article originally appeared in the Outfast Source blog.