A white label agreement is one that is created for the purpose of manufacturing of generic products by one party to be branded for and sold by another party.

White Label Product Agreement

The business of the future involves e-commerce. E-commerce is a novel way of doing business which allows for the trading of products, services, and goods across international borders. A white label product agreement gives a company the ability to encompass more markets than they would be capable of covering within just the four walls of the company.

White Label Agreement - Online Marketing and E-Commerce

E-commerce generally is done through an online presence, including promotion and marketing. By doing marketing and promotion online, it becomes quick and cheap to expand into many different markets. One way to reach more markets is by giving an affiliate permission to promote your branded services and product via your website. 

In order for an affiliate to do these things on behalf of a company, permission needs to be explicitly granted within a white label agreement so that the conditions of the agreement protect the company and its right. Since a recognizable brand will go a long way toward maintaining and strengthening consumer trust in a business, the branding process plays a very important role in the process of the resale of goods.

It may not be in the best interest of a company to manufacture their own products, especially when the goal of the company is to provide a wide range of products to consumers. In some situations, a white label agreement is not necessary because retailers just sell products that are manufactured and branded by other companies. However, sometimes it is necessary to use white labeling.

What Does a White Label Agreement Do?

A white label agreement is a contract between a reseller and a manufacturer. This agreement governs the product production by the manufacturer and also sets forth the proper application of the reseller's branding. A white label agreement contains specific and detailed provisions that set forth the following:

  • Product specifications
  • The manufacture of the products
  • Instructions for packaging production
  • Documentation of the products
  • Product provision warranties
  • Repair services
  • Customer support
  • Particulars of orders and pricing
  • Designation of intellectual property
  • Patents that apply to the product
  • Trademarks
  • Copyright

These agreements can contain a number of schedules to allow users the freedom and flexibility to choose definitions for substantive elements of each contract. The white label agreement is also used between the parties to specify conditions of the agreement and determine how revenue will be distributed between the company and the affiliate when a client or customer accesses the company's website by using the affiliates.

What is a Marketing Affiliate? 

A marketing affiliate is an entity that manages or maintains websites, banners, or other online marketing pathways that provide access to the original owner's website. When a white label agreement is used, it gives the affiliate the ability to establish, advertise, promote, and market the original company's branded website on the affiliate's website—allowing the affiliate to profit by using the original company' own brands and trademarks. The rules and conditions of this use by the affiliate are all set forth in the white label agreement governing the partnership between the two parties.

Issues Resolved by White Label Agreements

The white label agreement sets forth the scope and set up of the affiliate's webpage. This includes the length of time the affiliate page is set up, the layout, tracking systems, and content uploading restrictions and permissions. The white label agreement also identifies the specific license agreement to advertise, promote, and market that is used. 

Generally, an express warning is issued to the affiliate to warn it not to modify any proprietary materials or any materials that are specific to the owner of the company. This agreement also spells out in detail all of the obligations of the affiliate and the obligations of the owner of the company. These obligations typically include an obligation to ensure the website is running appropriately and without any interruption (especially when used by trading clients), payments, risk management, fraud screening, reporting, anti-money laundering monitoring, and content management.

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