White Label Agreement

Branding plays a vital role in the running of a successful business. Many entrepreneurs choose to “build up” a new brand by manufacturing its own products. However, in some cases that might create a problem. As an option retailers may simply sell products manufactured and branded by other companies, including based on the White Label concept. Hence the term white label partnership agreement. The White Label concept is understood as a concept that involves the production of goods or services by one company and the use of these goods and services by another company under its own brand. The White Label strategy is widely used in the production of electronics, foods, software thus the white label partnership agreement.

E-commerce should be mentioned in this connection. It is a new way of conducting business that breaks down nearly all barriers created by international frontiers and enables you to trade your product/service/good across borders. This enables a company to spread across more markets than they would ordinarily be capable of doing in a typical four brick walled company.

The white label agreement is also used for an arrangement where one party provides goods or services and the other party uses these goods or services under its own brand. This is ordinarily used where one party manufactures a generic product and supplies it to another party that brands it and sells it directly to customers. White label agreements are commonly used for the production of electronics, software and food.

What are the advantages and disadvantages of the white label partnership agreement model?

When choosing this model, the parties to the white label partnership agreement encounter some particular advantages and disadvantages. The reseller obtains a possibility to quickly start-up in any market and to reduce its own costs in connection with the production process. In this case the reseller may focus on its primary business and earn additional profit from the partnership program without investing huge amounts of money in developing new and complementary products. However, the reseller may not interrupt and influence the manufacturing process as all the technologies and design are part of the manufacturer’s sphere of responsibility.

The manufacturer may sell its own products and services without paying additional costs with respect to advertising and promoting its products. Moreover, the option of the white label partnership agreement allows the manufacturer to expand the range of customers of its goods and services, to form a successful business model to offer to the other potential similar partners. As disadvantages for the manufacturer, we may indicate that recognition of products brings benefit not for its own goodwill and business reputation but for the reseller’s goodwill and reputation. In addition, there are difficulties in getting direct callback from customers with respect to its products as all the contacts with the customers are maintained through the reseller. Another important aspect is selling its goods and services to the reseller for a lower price in comparison with the situation where it would sell it independently.

A White label agreement also allows resellers to quickly establish themselves in any market. The reseller isn’t burdened with the costs of developing and manufacturing a product, which can also be a time-consuming endeavor. The supplier is able to sell its products to the reseller and not have to concern itself with the costs associated with marketing it.

Which terms shall be included in the white label partnership agreement?

The white label partnership agreement is used between the original creator of products and services. That is, transferring a license to the reseller (white label partnership agreement).

The terms of a white label partnership agreement typically include the following terms:

  • Relationship between the parties and its legal nature;
  • Manufacturing of products;
  • White Label license and its terms;
  • Packaging and documentation;
  • Rights and obligations of the reseller and the manufacturer;
  • Product warranties;
  • Marketing materials;
  • Repair services and customer support;
  • Orders and pricing;
  • Product quality control;
  • Intellectual property rights;
  • Division of profits between parties;
  • Typical terms of agreement which may be found in every contract such as force majeure, limitation of liability, term and termination, confidentiality, assignment and other terms required for inclusion into the contract.

Which aspects should be taken into the account by the parties with respect to the white label partnership agreement based on White Label Agreement Law?

The parties to the white label partnership agreement shall regulate the following aspects:

  • Whether the manufacturer is allowed to communicate directly to customers of its goods and services (typically not allowed);
  • Whether your contracts provide exclusivity for parties (for instance, the manufacturer may be restricted in its right to resell products within a particular geographic region or within a specified period of time to other resellers or under your own name);
  • Whether the making of product changes or modifications is allowed;
  • Which performance progress is required from the parties in the first year and in all subsequent years;
  • How the costs and expenses should be split between the parties (for instance, who shall pay the cost of marketing materials, freight and transport costs, taxes and duties, etc.)
  • Whether the manufacturer retains ownership to the product recipe or formulation and the reseller – all intellectual property rights;
  • Whether the products comply with valid quality standards;
  • Who bears product liability;
  • Which number of products and services will be supplied by the manufacturer for its reselling by the reseller, etc.

Key aspects when drafting a white label partnership agreement

When drafting a white label partnership agreement, you need to regulate all the relationship with your counterpart, prevent and minimize all possible legal risks and liabilities and ensure all the terms of the contract comply with applicable legislative provisions.  At AGP we are experienced in drafting various types of contracts for individuals and corporations. Whatever role you occupy, you will definitely obtain competent professional legal assistance with respect to drafting a white label partnership agreement, which will secure your legal rights and interests.

Western experience shows that the concept of the white label partnership agreement opens up new possibilities for both major and start-up companies. The most important thing is to evaluate the potential of the above-mentioned model within the scope of your particular business in order to use it in the most efficient way to implement new technologies, develop new areas and find new customers. However, you should be aware of all the risks, perspectives, advantages and disadvantages in connection with it. AGP & Co is always ready to provide you with proficient legal advice of our lawyers to help you mitigate all the possible risks and build a successful business deal.

White label partnership agreement

The business of the future involves e-commerce. E-commerce is a novel way of doing business that 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 partnership 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 hence the importance of a white label partnership agreement.

What does a white label partnership agreement do?

A white label partnership agreement is a contract between a reseller and a manufacturer. This white label partnership agreement the product production by the manufacturer and also sets forth the proper application of the reseller’s branding. A white label partnership 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 white label partnership agreements can contain a number of schedules to allow users the freedom and flexibility to choose definitions for substantive elements of each contract. white label partnership 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 in a white label partnership agreement?

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 partnership 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 partnership agreement governing the partnership between the two parties.

Issues resolved by white label partnership agreement

The white label partnership agreement sets forth the scope and set up 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 partnership 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. The white label partnership 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.

What are the different types of white label agreements?

A white label software agreement sets out the terms and conditions on which the supplier provides the Software as a Service (SaaS) solution to the customer. It should include the supplier’s disclaimers and limits on the supplier’s liabilities in providing the SaaS solution. It also sets out the service level agreement committed to by the supplier.

  1. White label license agreement

This agreement defines the terms between a white label platform service produced by one company (the supplier) that other companies (the customers) rebrand to make it appear as if they had made it. For example, a booking platform for hair salons that hair salon owners can rebrand with their own logo, color scheme and style.

  1. White label partnership agreement

In the provision of services, a white label partnership agreement can be set up, for example, between an individual and a company, when the individual provides goods or services to the company on a project basis, without being part of the company’s core team.

  • White label agreement for products

This White label agreement sets out particular products a supplier agrees to provide to a customer. The customer’s branding and trademarks are applied to the product, for the customer to sell directly to consumers as its own product.











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