White Label

Some products aren’t made at all by the company whose name is on them. One business builds or programs something, another sticks its own logo on it and sells it. That’s exactly what’s called white-label. The name comes from the white, meaning blank, label: the goods are delivered without printing, and the buyer fills in their own name. To the end customer, it looks as if everything comes from a single source. This is familiar from the supermarket, where private-label brands are often made in the very same factories as the expensive brand-name products.

Why companies sell other people’s technology under their own name

Developing software or AI systems yourself costs a lot of money and time. A mid-sized bank has neither the specialists nor the data centers to build its own language model. But it can buy a finished system and build it into its app. The customer then only sees the logo of their bank. This way, a company arrives at a product in months that would otherwise have taken years.

For the manufacturer, this pays off too. It doesn’t need to run expensive advertising or build up customer support. Instead, it sells its system to ten or a hundred partners, each of whom brings their own customers along. The business scales quickly, because the same technology is rented out multiple times.

But there’s a price to pay for this. Whoever buys white-label makes themselves dependent. If the provider raises its prices or discontinues the service, the company suddenly finds itself without a product. Moreover, competitors often offer exactly the same system, just with a different logo. Real distinguishing features barely emerge this way.

From finished system to your own brand

Technically, white-label usually runs through an interface, a so-called API. This is a defined request format with which one program can ask another for results. The bank’s app sends the user’s question to the AI provider’s servers. There, the computation happens, and the answer comes back into the app. The user notices nothing of this detour.

What’s customizable is mainly the interface. The partner may set colors, fonts, logo, and often also the name of the assistant. Sometimes the tone of the responses can additionally be adjusted, or a proprietary dataset can be integrated. The core of the model, however, remains the same for all customers.

It’s important to distinguish this from open source. With open-source software, the program code is openly viewable and may be freely modified. With white-label, the code stays with the provider; only its use is rented. A common misconception is also that white-label is a sign of poor quality. That’s not true: even very good systems are distributed this way.

White-label in apps, banks, and news

You encounter this constantly in everyday life without it being labeled as such. The chatbot on an insurance company’s website rarely comes from the insurer itself. Online shops, payment processing, or translation features in apps are also frequently bought-in technology. Even some mobile phone plans work this way: a small provider uses the network of a large corporation.

In business news, the term usually turns up in connection with partnerships. When it’s reported that an AI company will be supplying its technology to a car manufacturer going forward, there’s often a white-label agreement behind it. For investors, this is interesting because the revenue lands with the invisible supplier, not with the well-known brand.

If you want to know who’s really behind a service, it helps to take a look at the privacy policy. There, companies must state which service providers data is passed on to. Often the names listed there are providers that don’t appear anywhere on the homepage.