5 Reasons SEO White Labeling is Actually a Bad Idea

By amanda Disilvestro on September 5, 2016

Don’t be fooled by the word “white” in regards to this SEO practice. You may not yet be familiar, but SEO white labeling (also known as an “SEO reseller”) is basically a partnership where two companies work together to sell and deliver services, and then share the sales profit. In most cases you can think of SEO white labeling in the following terms, with companies “A” and “B”:

  • Company A: Responsibilities typically include sales/customer acquisition and account management.
  • Company B: Manages and executes product development and the actual delivery of the services.

Consider a software (for example) which is created and managed by one company, and then can be utilized and provided by several other companies that put their own name on it, but who did not originally invent or develop the software themselves. Company B is the original developer of the product, but Company A is actually the agency that works directly with the customer/business. The reason people choose this route is because it is typically a cheaper service, since building this kind of service/product from the ground up (i.e, Company B) is really expensive and takes a lot of time, people, and energy to execute.

On the other hand, dealing with clients and sales is also a different side of the challenge. Company B doesn’t want to deal with client relations and account management. However, company A can take care of all of that and not have to worry about the product development on the back-end.

5 Reasons Why SEO White Labeling is a Bad Idea

To summarize, a “white-label vendor” is a site which sells products directly to clients (products which were developed by company B), but under a completely different domain, brand or company name than “company B.” They are completely separate entities, and company A becomes the face of the product.

All of this sounds pretty collaborative, and with the cost-benefits aspect of SEO white labeling. It is pretty clear to see why companies might go this route; however, there are some problems with this system and there are a few reasons why SEO white labeling is actually a bad idea.

#1 “Company A” Gets All of the Credit

In our introduction we laid out the scenario where company A is dealing with sales and account management, and ultimately getting to put their name on a product and service they didn’t develop. While both A and B are sharing the profit from the client and both are benefiting in a financial way, company A is getting all of the credit and is ultimately the brand that is attached to the product, even though it was developed by company B. In other words, company B is putting in a lot of the footwork to make white-labeling possible, but their brand is not achieving any growth in recognition.

#2 There Are Major Benefits to Account Management

One of the reasons that company B opts to develop the product without having to deal with account management is because it cuts down their work load and allows them to focus on the product itself. The problem is that actually managing accounts and dealing with sales directly can actually teach a company a lot about what needs to improve, change, and what clients are actually looking for in the service. By cutting out the relationship with the client directly—without taking any additional steps to get feedback from company A on sales and client relations—the developer is missing a lot of valuable insight that comes with account management.

#3 Price Isn’t Everything for Clients

One of the biggest draws to SEO white labeling is that it is cost-effective. It is cost-effective because there are two businesses doing two parts of the process and sharing the income. However, when companies split their roles like this, they may lose site of some of the other really important aspects of business, like providing outstanding customer service or really understanding what clients need. When price is the main selling point, or the thing that separates a company apart from others, it is possible that clients will not be getting the best service possible.

#4 Reviews, Testimonials, and Word of Mouth

This is more-so an issue for “company B” in this white label scenario than it is for company A. Nowadays, reviews, testimonials, and positive word-of-mouth from clients goes along way. If you are company B, you are probably getting positive feedback from the folks at company A, but company A is the one that is getting all of the reviews and positive customer feedback online. Their brand awareness is improving through their customers’ feedback. Ultimately, this is one of the downsides of while labeling that makes the business relationship more asymmetrical than it initially appears with revenue and splitting costs. If you are developing the service from the ground up, you deserve just as much praise from customers as the brand selling your product, but unfortunately, the product will have company A’s name on it.

#5 You Lose Originality

If you are company A, and you are getting products from company B, who is outsourcing their products to multiple vendors, you do not have an original product for resale. Increasingly, those who choose to white label and provide a product to multiple sites are interested in having a multi-brand or a multi-domain strategy. It is not enough for them to work with your company alone, especially because company A is getting all of the recognition and growth on the surface. Long-story short, if you are participating in a white-label exchange, you could really be compromising on the originally and quality of the products you are selling.

The Takeaway

White labeling appears to be very lucrative on the surface. At first, it looks like a pretty even exchange, where both companies are benefiting from the collaboration. However, in most cases, the company that is actually doing the sales, account management, and customer service is going to benefit a lot more than the company that is providing the products and services. More importantly, all of these disadvantages could potentially impact your SEO rather significantly.

As a Marketing Agency, our recommendation is not to get involved in a white-label situation. There is value is working both sides of product/service development and customer interaction.

Have you partaken in a white-label exchange or purchase of any kind? Have you considered white labeling or opted out for any particular reason? Let us know in the comments section below!

 



About The Author

amanda Disilvestro /