Joint-venture, white labelling or direct sales? New hardware entering into an established market.

A hardware based startup with an innovative technical solution is looking to enter into a mature, consolidated market. There is enough of technical advantage to consider direct sales, but this would have a longer road to break-even. Alternatively, there is the option to work with companies already established in the field. My main questions are: 1) What is the correct word/jargon to define a) selling a subassembly exclusively to an existing player, b) selling a manufactured product to be branded and sold to an established player (possibly exclusively for a time) [white label?], 2) How do I find cases/examples of these type of arrangements to get reference numbers so I can run financial projections? We have met a few of the bigger players, and definitely see a road with JV or some other partnership. Need to build out my understanding of how these type of deals work - otherwise I am flying blind. Thank you.


The answer to your first question is pretty simple. Basically you are talking about doing an exclusive deal on a (hopefully pattented) item, or just slapping another companies logo on an item which would be a custom label or private label. White label usually refers to SaaS.

Cases are all around you. This just happened to me at Walmart. The Ragu brand and GreatValue brand were right next to each other and were in the same jars. Ragu more than likely did a private label spaghetti sauce for Walmart's GreatValue brand. You can also Google - "top private label brands" or other variations of this search phrase.

Answered 4 years ago


Do a SWOT of your business and it will help you get answers.

Also draw out scenarios in each case of business projections over 3-5 years and compare based on rates of returns, risk and investments etc. to decide.

Let me know if you need help to think through.

All the best.

Answered 4 years ago

I'm a corporate development expert with 30 year's experience in partnerships, JV's, sales channels, product development and marketing.

1a) Jargon would be "integration partner", integrated component provider, or "ingredient brand". There are a bunch more depending on how you want to position things.

1b) Needs some clarification. If you mean you are selling a pre-manufactured, complete product that is being branded and re-sold by another company, that would be a white label manufacturer/provider.

Examples of these arrangements can be found two ways.
Subscribe to an industry research report that focuses on sales/revenue statistics (Gartner may be a source for this) or work with a consultant or someone like me who has put together these types of channel partnerships who can provide some projections based on some basic assumptions from you.

Happy to help you in this area, quick chat or a project. Feel free to connect.


Answered 4 years ago

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