How to Keep Margins High While Selling White Label Apps to Clients

A "white label" app is an application as a service that is developed by one company and then rebranded and sold to the clients of a different company. White label apps typically require minor customization in order to meet the needs of clients and allow them to use the app as their own product.

White label app development is a viable strategy for some development agencies because, although various clients have different design patterns and required functionalities in their applications, these patterns and functionalities can sometimes overlap. A client may or may not be allowed to resell a white label app as their own product as well.

White label app development is a useful strategy for generating applications that share a common set of core functionalities and features. It helps to avoid repetition of code, provides consistency across different modules within the app, and saves a significant amount of development time and related costs.

The common set of core features can later be developed and expanded with more features based on different client requests. One major consideration for white label app resellers is the need to anonymize the application and conceal its third-party origin from consumers who buy the end product.

Purchasing a white label app

Before purchasing a white label app, you should start with a detailed outline of the requirements for each feature of the app you are building. In most cases, this will be specified by your client. You can then use this outline to create placeholder screens that represent the initial UI and UX of the application. This helps you design the complete user flow that you intend to deliver.

After laying out the design, you may choose to build some of the app yourself or immediately shop for white label development. If you're building some of the app yourself, it's recommended that you build in discrete pieces that can be easily inserted into the eventual white label app that you purchase. Starting with front end development may be easiest, since most white label apps will require UI customization of some kind anyway.

Before you decide to purchase a white label app from a third-party development team, you should ask for either a demonstration of their existing white label app template or a demo of a similar app that the company has built. Many white label app developers have a stock of prebuilt modules and apps that you can choose from, but sometimes they will need to build your white label app from scratch. You should carefully review the product they're offering in either case.

Customizing a White Label App

Once a third-party team delivers your white label app, you will likely need to make some changes to prepare it for delivery to your client. These will almost certainly include UI changes to include the client's branding and design requests. They may also require some backend configuration to ensure that the app stores and processes its underlying data correctly.

The development of an application's features is the most time-consuming part of this process. However, testing an application's user flows and features should be on your list as a requirement for any potential bug that can be fixed before the app is released. You may be able to require the developers who build your white label app to test it before you buy it, but you will likely want to run your own tests before delivering it to your client anyway.

The last part of this process is deploying the app on your chosen platform or multiple platforms. The exact deployment will depend on customer requirements, but the app you purchase should be capable of running on as wide a range of platforms as possible. There may be other factors such as infrastructure, maintenance, monitoring, operations, and security as important additional requirements.

Finding a Reliable Third Party to Build a White Label App

While searching for a reliable third party team to build a white label app, you have to make sure that there are frequent progress reports and initial versions of the app available for review. Mobile white label apps are a great value offering for end-users, and they require high-quality development work that supports customization.

From the start of the app development process, you should consider it a best practice to include support for multiple revisions and releasing the app on multiple platforms. When reselling the app to a vendor or client later on, a lack of support for their desired app platform could require you to rebuild the app from scratch or completely lose a potential client.

Businesses that utilize white label apps traditionally prefer to keep the details of the app's initial development from their clients. This is done to keep their own business sustainable, since clients may simply opt to take their business to the white label app developer. If you purchase a white label app, you should ensure that you can properly anonymize the application's origin.

To make sure the app you are offering to your client feels like an app that is developed in-house, you'll need to customize it in a unique way. One way to achieve this is to study competitor apps in the same market and add a few innovations that improve on those products. Another option when using a third-party vendor is to request or purchase the initial versions of different app components they provide and reuse those that are suited well for your app.

It is important to make sure that the white label app partner you work with has similar goals that align with your business. They should be willing to have healthy communication and open to listening to your suggestions for further improvements in the service you are interested in. They should also have experience developing a wide range of applications for different client types.

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Advantages of a White Label App

There are some factors that can help you decide whether purchasing a white label is good for your business or not. Positive aspects of white label apps include the following benefits.

  • Fast product delivery: If all you need to do is rebrand the app and add one or two features, you can deliver it to your client in weeks or even days.
  • Low initial investment: You can get an MVP into your customer's hands quickly and earn ongoing development from them as their budget grows.
  • Easier to serve niche clients: Although most white label apps are intended for generic product types, using a white label app for a highly specialized build can save you some time on basic features and allow you to dedicate more time to planning niche features.
  • Low commercial risk: The app offered to clients has been tested and is a proven solution that doesn't require you to reinvent the wheel.
  • Professional support and maintenance. The white label app partner you work with may offer post-release maintenance that usually consists of updates and bug fixing in the initial version.
  • Access new customers: Purchasing white-label apps from a supplier could help you expand your business into more markets and add new revenue streams.

Drawbacks of a White Label App

When considering white label development as a business strategy, it's important to account for potential downsides as well.

  • App store rejection: The app store guidelines for different platforms are formulated in a way to avoid app clones and spam apps, so there is a chance that a white label app could get flagged if it isn't properly customized.
  • Limited scalability: White label apps don't receive source code updates and are completely based on decisions made by the original development team, so any future changes will require fully custom development.
  • Limited feature set: A white label app developer may provide a basic set of features but no additional or trendy features. This could be good and bad at the same time. The good part about this is that it keeps costs low, but the bad part is that those additional features could prove to be a great boost in terms of reaching a larger audience.
  • Cloud platform lock-in: For convenience, some white label developers may use cloud-based services for storage, requiring the client to transfer the user's data to the cloud. This may lead to an issue known as vendor-locking and data exportation challenges in the future.

Key Factors in Maintaining High Margins on White Label Apps

When it comes to selling a white label app, there are some major factors that you have to consider. The price of your product is going to depend on what business strategy you are adopting.

Know the competition

The first and foremost thing to do is research the market. Knowing the price of similar apps offered by your competitors is the best way to get a head start.

For example, if competitor A sells the app for X amount, and competitor B offers the same app at a price lower than X, then B stands to gain a larger market share than A – unless A's product comes out with a unique advantage over B. The pricing of your white label app should be determined in response to your competition.

Price according to your capacity to provide unique value

If you plan to sell your white label app at the high end of the market, you can price your product at a premium. This way, you set the standard for how much the app should cost and set up client expectations to justify higher build costs. This approach gives you more internal flexibility to maintain high margins.

However, a high price point is only possible if you are capable of customizing your white label apps to include unique features that meet a specific market demand. Knowledgeable customers will not pay high prices for a generic app template that isn't differentiated from the rest of the market in a significant way.

The alternative approach is to price your app at the low end of the market. This approach becomes profitable when you sell the app at high volume. To maintain sustainable margins, you'll need to minimize the cost of development, which is what makes this approach such a good fit for white label apps. With white label apps, you can provide your client with value that is comparable to other products on the market with minimal effort on your end.

Choose your white label opportunities strategically

When breaking into a new industry or trying out a product under a new domain, your costs can be unpredictable. You might not want to put a lot of money into this new domain, since you're only trying to test whether you can get some traction in the market. In this case, white label apps provide you with a good starting point and might lead to high returns at a lower risk for your business.

Get added value out of your white label developer

Paying a third party to build a white label app can set you up for long-term profits, but it also exposes you to long-term testing and maintenance obligations. One way to maximize the value of a white label app is to request continued support for the app from the original development team once it is live in cross-platform app stores.

Most apps will require ongoing maintenance and additional features down the line, and having support from the original developer could save a ton of development time. This could also lead to the ultimate satisfaction of consumers and clients alike, since the new additions are going to be well-tested. By minimizing the looming threat of potential bugs, third-party support allows you to focus entirely on selling the app and building potential customers around it.

Also, if your business is in its initial stages, hiring an in-house team of talented people and resources is going to cost more than the initial margins earned on a product built from scratch. By leveraging white label apps internally, you can get off to the races with minimal up-front investment.

Crowdbotics and White Label Apps

There are a growing number of options available when it comes to purchasing a white label app. You will need to ensure that the white label app that you are looking to purchase matches your requirements and will serve your clients' needs.

Most new applications look like applications that have already been built before. This is a leverage point to consider when assessing the frameworks, packages, and libraries used to build an app. Selecting a white label app that gives you maximum deployment flexibility with no loss in quality is the best way to squeeze value out of the app.

At Crowdbotics, we offer the fastest and most flexible way to develop cross-platform white-label apps. Our expert developers and product managers are experienced in building apps that agencies can quickly customize and deploy to web, mobile, desktop, or universally.

Our key advantage is that use an opinionated technology stack that we call RAD stack. This stack is composed of a combination of React Native and Django.

React Native is a cross-platform framework allows you to build the front end of an application only once and then use it across different platforms such as iOS and Android. Building a backend in Django offers you protection against vulnerabilities like cross-site scripting and SQL injection attacks. This stack is well tested by our team of developers in healthcare, finance, business intelligence, and technology contexts.

If you are looking for white label apps, we're glad to offer Custom White Label App Development.

Get in touch with us today to learn about the technologies we use, the process of building a white label app with us, our expertise in your industry, and what other clients have to say about white label app development with Crowdbotics.

Originally published:

October 20, 2020

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