Have you been itching to augment your pharmacy’s brand while making extra revenue? If so, look no further. Both white label and private label supplements are great opportunities. Not only do they reinforce your pharmacy’s identity, but they create stronger relationships with your patients and can rapidly increase your profitability. Here are the differences between the two.
White label products
White label products are generic products manufactured by one company. However, they’re eventually branded and sold by multiple retailers under their own brand names. This means that your business can offer new products, but you don’t have to invest in the production process.
“White label offers you a controlled selection of generic products. But when it comes to formulation, you are unfortunately limited to what a manufacturer is offering,” said Kim Leach, National Account Manager for Quality Choice. “It gives you the opportunity to have a printing company put your logo on the product. A great way to utilize white label would be to customize products for additional marketing; for example, retailers could put their logo on giveaway products and pharmacy bags.”
Costs of white label products vary. It all depends on the product type, customization level, and order quantities you need. You’ll find that the initial costs typically include product development fees, sample costs, and packaging design. You’ll also have production costs. These might include manufacturing, packaging, and labeling expenses.
Having your own white label products allows you to make a good first impression and strengthens your patient relationships. They simply get your name out there in ways that work.
The Benefits of White Label Products
- Faster product launches: You have a product that’s ready to be sold, therefore you rely on your branding and marketing efforts to sell it.
- Risks are minimized: By purchasing a white label product, you’re buying a product that’s already been tried and tested in the market. Your products are from companies known for making a particular product. Therefore, your job is to only sell.
- Introducing a new product: It’s tough to feel pressured to introduce a new product, but you don’t know what exactly to sell. While not the greatest strategy, white labeling can help. You can choose from a wide variety of products to sell.
The Disadvantage of White Label Products
- No defense: If you rebrand and sell white label products, be aware that there is a possibility that competitors may be offering the same product. If there isn’t anything unique about your product compared to the competitor’s, their product will most likely sell more than yours.
- Quality isn’t consistent: If your supplier of the white label products has poor quality control measures in place, your customers may have different experiences each time they purchase your product. If they don’t get excellent quality every time they purchase your products, they’ll most likely find another option somewhere else.
- No control of the production process: When you have white label products, you have no control or say in how your product is manufactured. What you can control is your product’s marketing, distribution, and sales.
Private Label Products
Private labels are customized products that are created by a private label manufacturer exclusively for one retailer. They’re manufactured by a third party but are marketed and labeled with the pharmacy’s branding. This allows them to offer a lower-priced alternative to national brands.
“When pharmacies partner with a private label, they get to handpick products from a variety of well-developed categories that truly meet their customers’ needs,” Leach said. “Shoppers get a high-quality alternative at a more affordable price, often backed by a 100% satisfaction guarantee.”
Private labels also have more customization options and control over the branding. Because of this, they’re typically more expensive due to increased customization and exclusivity. They’re also cash sales that go into your bank, so you don’t need to worry about people asking you for money at the end of the quarter. They provide greater margins and instantly contribute to your cash flow, giving OTCs a dual benefit that prescription sales can’t provide.
Benefits of Private Label Products
- Stands out from the competition: A private label product in a community pharmacy refers to over-the-counter (OTC) medications or other health and wellness items sold under the pharmacy’s own brand name. A private label product is unique because you can tell them what goes in it, how it’s packaged, what the label looks like, and so on. And only your brand can sell it. Therefore, you stand out from your competitors. You have greater control over production and can be sure your customers have a consistent experience every time they purchase your product.
- Easily customizable: Once you launch a product, making improvements is a piece of cake. You can specify everything about the product.
- Control over pricing: Private label products are different from others and can help your pharmacy stand out from the competition. Therefore, you can charge higher prices for your product and gain higher margins.
- Greater margins: Private labeling can produce improved profit margins compared to traditional manufacturing. Retailers often see gross margins on private labels that are 25-30% higher than those on manufacturer brands.
The Disadvantages of Private Labeling
- Finding high-quality products and manufacturers: It’s often challenging for product developers and entrepreneurs to create their own private label products. Therefore, finding reliable manufacturers who produce high-quality products can be expensive and time-consuming.
- Researching and understanding your target market: The other challenge with private labeling is understanding what your target market is looking for. So, look at what they like, need, and how they like to buy things. You don’t want to skip this step. If you do, you might sink a large amount of money into private label products that your customers aren’t interested in.
Developing a private label without expert help can be intimidating. For instance, if you don’t have experience in market research, it’ll be difficult to figure out your target audience or the best people who can get a product design ready for you. As for a white label product, it can get expensive fast if you aren’t working with the right manufacturers.
“Building a strong brand means collaborating with your private label to train employees, using eye-catching in-store signage, running social media ads, and taking advantage of any other marketing resources private label provides that are backed by their manufacturers,” Leach said.
Whether your pharmacy decides on white label or private label products, here are some items you may want to add to your labels:
- Vitamins and supplements
- Pain relievers
- Allergy products
- Personal protective equipment (PPE), such as gloves, footwear, eye protection, and protective hearing devices (i.e. earplugs)
- Beauty products (skincare products, lotion, shampoo, and baby products)
- Personal care products (toothpaste, deodorant, soap, shaving creams)
- OTC items, such as antihistamines, cold and flu medicine, antacids, and anti-inflammatories
- First aid products (bandages, antiseptic creams, and pain relief sprays
More articles from the March 2025 issue:
- Welcoming AI into Your Pharmacy
- AI-Powered Patient Counseling
- Diagnosing Childhood Asthma
- New Weight-Loss Drugs
- Secondary Stress
- Sight-Loss Support
- PBMs and How They Affect Your Pharmacy
- White Label vs. Private Label Products
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PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and run by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
